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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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Thursday, 08 September 11
TRADA MARITIME BUYS GUNUNG BARA UTAMA
Insider Stories reported that, PT Trada Maritime Tbk (TRAM) has purchased convertible bonds issued by PT Awesome Coal from Zakia Limited. The memora ...
Thursday, 08 September 11
PETROSEA ADDS US$730 MIO CONTRACT
Coal mining contractor PT Petrosea Tbk (PTRO), a majority owned subsidiary of energy integrated company PT Indika Energy Tbk (INDY), has secured a U ...
Wednesday, 07 September 11
ANOTHER EXCEPTIONALLY STRONG WEEK FOR THE CAPESIZE MARKET - BRS
The very strong rise in Cape rates pushed through an overall improvement in the BDI this week, although relatively little benefit from the Capes has ...
Wednesday, 07 September 11
INDIA HIT BY INDONESIAS COAL PRICE - TEMPO INTERACTIVE
TEMPO Interactive, an Indonesian online news portal reported that, The Indian government has complained about the price increase of Indonesian coal, ...
Wednesday, 07 September 11
SAMPUR POWER AGREEMENT SIGNED - DAILY NEWS
Daily News, Sri Lank's national news paper reported that, the agreement for the setting up of a 500 MW coal-fired power plant at Sampur, Trincomale ...
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- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
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- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Planning Commission, India
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Australian Coal Association
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
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- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- The University of Queensland
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- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Parliament of New Zealand
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
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