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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, 03 September 11
FEW SHIPS REPORTED FIXED FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - The freight market continued the upward trend during last week with BDI up by about 13 pct closing at 1,740 points and cape index up ...
Saturday, 03 September 11
TNPL TO BUY 240K MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure 240,000 MT +/- 5 percent of non-coking imported coal with ...
Friday, 02 September 11
CAPESIZE DEMAND LIFTS DRY BULK MARKET ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what proves to be the best week of the year for Capesize owners, strong demand has helped propel the dry bulk market to new highs yesterday. The ...
Thursday, 01 September 11
EWP TO BUY 195KT OF VIETNAM COAL
COALspot.com - Korea Midland Power (KOMIPO) has issued an International open bidding for 490kt of sub bituminous coal, according to a bid invitation ...
Thursday, 01 September 11
DRY BULK MARKET TAKES GREAT LEAP FORWARD - NIKOS ROUSSANOGLOU
In what turned out to be a rather hopeful ending of the month, the last day of August saw the dry bulk market’s benchmark, the BDI (Baltic Dry ...
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- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
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