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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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Saturday, 10 September 11
THE FREIGHT MARKET LIKELY TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com - The freight market continued the upward trend during last week with BDI crossing 1,800 points and closing at 1,838 points up by 5.63 ...
Friday, 09 September 11
SUPRA BARA SECURES $20 MILLION LOAN - JP
The Jakarta Post reported that, Coal miner PT Supra Bara Energi says it has secured a US$20 million loan facility from BNP Paribas to buy heavy equi ...
Friday, 09 September 11
CAPESIZE CAN SECURE USD 17-18K SHORT PERIOD - FEARNBULK
Handy
The US Gulf has remained relatively steady, slightly more activity in the South Atlantic with owners aiming for low to mid USD 20k´s f ...
Thursday, 08 September 11
UKRAINES COAL PRODUCTION TO RISE 8% - IFANDP
Industrial fuels & power reported that, Ukraine will increase its coal output by about 8% this year compared to last year, said the country&rsqu ...
Thursday, 08 September 11
DRY BULK MARKETS RALLY COMES TO AN END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected by analysts and shipbrokers alike, the latest rally of the dry bulk market came to a halt yesterday, with the Baltic Dry Inde ...
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- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Planning Commission, India
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Australian Coal Association
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
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