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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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Friday, 26 August 11
INTRACO EYES US$200 MIO COAL TAKEOVER - INSIDER STORIES
Heavy equipment distributor PT Intraco Penta Tbk, that was founded by Halex Halim, is scouting a coal acquisition with the valuation above US$200 mi ...
Thursday, 25 August 11
OPG EXPECTS COAL PRICES TO REMAIN FIRM IN THE SHORT TERM
COALspot.com - Revenue of OPG, the developer and operator of Group Captive power plants in India up 188% to £33.15m and Income from continuing ...
Thursday, 25 August 11
PAITON POWER LOOKING FOR 3.96 MILLION TONS OF COAL
COALspot.com - PT Pembangkit Jawa Bali (PJB) is looking for 3.96 million tons coal with calorific value 4,800 kcal/kg on as received basis. Accordin ...
Tuesday, 23 August 11
ICMA CALLS GOVERNMENT TO REVIEW EXPORT BAN REGULATION
COALspot.com - Chairman of the Indonesian Coal Mining Association (ICMA) Bob Kamandanu asks the government to review the regulation that being draft ...
Tuesday, 23 August 11
ADARO ENERGY ACQUIRES 75% STAKE OF PT MUSTIKA INDAH PERMAI FOR US$ 222.5 MILLION
COALspot.com - PT Alam Tri Abadi, a wholly owned subsidiary of PT Adaro Energy Tbk, signed a share purchase agreement to acquire a 75% stake of PT M ...
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- White Energy Company Limited
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- The Treasury - Australian Government
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
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