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Saturday, 17 April 10
DRY BULK SHIPPING MARKET ANALYSIS - BIMCO
 Strong Chinese steel market is set to cushion the flood of new Capesize vessels entering the dry bulk fleet Demand: The first quarter of 2010 saw ups and down for the BDI with the index hovering around 3,000. It seems as if the market is balanced on a knife edge. High supply is likely to overmatch even very healthy demand growth rates – strongly dependant on China.
Chinese iron ore imports continue to remain firm. In the first quarter of this year, China has imported an average of 51.68 million tons (mt) of ore. In 2009, iron ore imports reached a monthly average of 52.37mt, leaving this year’s ore imports just 1% short of 2009 levels, but still very healthy at 14.7mt (40%) more than 2008 levels. With steel prices rising above those of 2009 – Chinese iron ore imports will continue as the prime driver in the dry bulk market.
However, the present spot rates are not expected to stay that low as time charter rates stay strong as illustrated by the reported BHP Billiton booking of a Capesize vessel for 3-5 months at USD/day 37,000 - more than 30% premium to spot. The current FFA (Forward Freight Agreement) rates also point in that direction with Capesize Q2 FFA going up to USD/day 35,750 and Panamax Q2 going down to USD/day 28,500.
Supply:
The active fleet has grown by 3.5% during first quarter of 2010, caused by deliveries of 16 million DWT of newbuildings offset by just 1 million DWT being demolished. Since BIMCO Bulletin 1/2010, the total dry bulk order book has increased by 5.5 million DWT. It seems as though the optimism from surprisingly healthy freight rate levels in 2009 has made contracting go on – despite the fact that the 285 million DWT that comprises the order book today is doomed to make challenging markets in short as well as long-term.
Year-to-date deliveries in capesize amount to 47 ships comprising 8.7 million new DWT, resulting in an increased fleet size of 5% so far in 2010 and active Capesize vessel number 1,000 has just been delivered. At the beginning of 2009, 822 Capesize vessels were active, but an inflow of 112 newbuildings and 29 converted vessels was added to the existing fleet, counterbalanced by just 9 demolitions, leaving a fleet tonnage growth of 18.5% in 2009.
An additional 305 Capesize vessels are scheduled for delivery in 2010, but “only” 183 will hit the water, when applying the BIMCO assumptions for supply forecast as described next to the graphics. In total, this will in turn mean that Capesize tonnage could grow by 21% when fine-tuning for an average scrapping age of 26 years for Capesize vessels
as compared to the average of 30 years for the overall fleet.
BIMCO forecasts inflow of new dry bulk tonnage in 2010 to reach 76 million DWT, offset by demolition of as much as 13 million DWT. This could make the fleet grow by 14% in 2010 as compared to 10% in 2009. Deliveries in 2011 are forecast to be even higher before supply growth comes down in 2012.
Clarkson’s have scheduled deliveries of 120-130 million DWT in 2010. BIMCO assumes that 10% of the entire order book will not be built and one third of the rest will be deferred by one year. Furthermore, the demolition potential is calculated to 49 million DWT, equal to all vessels aged 30 or above to be demolished by the end of 2013.
Outlook:
The fortunes of the dry bulk markets are basically down to the fortunes of China. March was the 13th straight month that the official Chinese PMI (Purchasing Managers Index) has stood above the threshold of 50 that demarcates expansion from contraction, indicating that the Chinese economy is on a stable and relatively fast growth track. PMI rose to 55.1% in March, up 3.1% on last month, according to data released by the China Federation of Logistics & Purchasing.
The housing market and huge infrastructure projects have been primary beneficiaries of the Chinese Government’s stimulus package. With the construction sector being the number one steel user, consuming around 50% of Chinese steel, it goes without saying that a continuance of the strength in this sector is vital for the health of the dry bulk freight rates.
Freight rates are forecast by MSI to drift sideways on current levels over the next 6 months. Capesize rates are forecast to stay around USD 30-35,000 per day while the smaller vessel types could see rates go down from current levels to around USD 16-24,000 per day.
Current news:
BHP Billiton has reached agreement to sell the majority of its iron ore to Asian steel mills on shorter term contracts, ending more than 40 years of annual pricing. Brazilian Vale have also inked new iron ore prices – resulting in price hikes of around 90%– indicating a continued strong demand for the vital raw material in steel production. Contract prices for coking coal are also expected higher.
Meanwhile, the China-Rio Tinto bribery case has just been settled. The court in Shanghai sentenced the four convicted Australian mining giant Rio Tinto employees to prison for a total 39 years. They were found guilty after having admitted to accepting about USD 13 million in bribes from private steel mills that wanted to avoid purchasing iron ore from more costly state-run mills. The arrangement undercut the state’s China Iron and Steel Association’s desire for a united front in negotiating with Australian suppliers. Shortly after the verdict the employees were sacked for clear violation of Chinese Law and Rio Tinto’s code of conduct. China claims its steel sector paid as much at USD 160 million too much last year for iron ore because of bribery and espionage. While the three Chinese defendants have decided to appeal terms, the Australian national Stern Hu appears to be the only one not appealing terms.
Source: Bimco / Hellenic Shipping
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Wednesday, 21 September 11
2ND ANNUAL SHALE GAS SUMMIT
2nd Annual Shale Gas Summit 31 October – 3 November 2011 JW Marriott Hotel, Hong Kong
According to a recent EI ...
Tuesday, 20 September 11
MTD INAUGURATES ITS COAL TERMINAL IN JAVA ISLAND
Press Release – MTD Group of Malaysia, one of prominent key players in the development of infrastructure in Malaysia, today inaugurated their ...
Tuesday, 20 September 11
DRY BULK MARKET LOSING ITS EDGE, RETREATING AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a surge during the past couple of weeks, which saw Capesize earnings boosted and the BDI (Baltic Dry Index) reaching levels of year high and c ...
Monday, 19 September 11
CHINA IMPORTS MORE THAN 10 MMT INDO COAL IN AUGUST 2011
COALspot.com - Indonesian coal exports dropped 1.642 million tons in August compared to July exports. Indonesia exports 29.662 million tons of coal ...
Monday, 19 September 11
INDOMOBIL ENTERING INTO COAL MINING BUSINESS
COALspot.Com- PT Indomobil Sukses Internasional Tbk, part of, one of Indonesia's largest conglomerates, to enter into mining industry ac ...
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- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
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