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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, 14 September 11
GOVT SETS SEPTEMBER COAL REFERENCE PRICE AT $116.26 PER TON
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the September 2011 coal reference price at US$ 116.26 per ton slightly ...
Tuesday, 13 September 11
CAPITAL COSTS OF INDIAN COAL MINING PROJECT - AN ANALYST VIEW
By Mr Dipesh Dipu, Director - Consulting (Mining), Deloitte Touche Tohmatsu India Private Limited
The coal mining sector that has been opened par ...
Tuesday, 13 September 11
INDONESIAS COAL SECTOR EYES 2012 BOOM - JG
The Jakarta Globe, Indonesian English language News paper reported that, Coal production is set to surge next year as coal miners bolster their busi ...
Tuesday, 13 September 11
DRY BULK RALLY MAINTAINS MOMENTUM AT START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum at the start of the week, as the industry’s benchmark, the Baltic Dry Index (BDI) was up by 2.07% ...
Monday, 12 September 11
INDONESIAN GOVERNMENT HAS ALLOCATED MORE COAL FOR 2012
COALspot.com - Indonesian government has increased the domestic market obligation allocation to 82.07 million tons of coal for 2012, which is 4 perc ...
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- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Parliament of New Zealand
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
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