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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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Tuesday, 23 August 11
COAL DEMAND IS REMAINED STRONG IN SPITE OF CURRENT GLOBAL ECONOMIC UNCERTAINTY - BUMI
COALspot.com - Indonesia's largest coal producer, PT Bumi Resources, Tbk (BUMI)'s sales revenue has increased to US$1.79 billion (compared with US ...
Tuesday, 23 August 11
PENRHYN COAL USING EVERGREEN ENERGYS COAL UPGRADING PROCESS
Evergreen Energy Inc has announced the successful testing results of the initial batches of Penrhyn coal using Evergreen Energy’s coal upgradi ...
Tuesday, 23 August 11
A SHARP INCREASE IN THE BDI - BRS
A sharp increase in the BDI this week, driven by the rise in Capesize rates. Overall the BDI was up 13.5% to 1,462 points on the back of a 20% surge ...
Monday, 22 August 11
INDONESIA TO BAN BELOW 5700 KCAL/KG COAL FOR EXPORT
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia is in the process of drafting a regulation which is requiring mine owners ...
Monday, 22 August 11
JATENERGY AGREED TO FORM JV WITH AN INDONESIAN COAL MINING COMPANY
COALspot.com - Australian’s listed company, Jatenergy Limited has entered conditional agreement to form joint venture with Indonesia’s c ...
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- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Planning Commission, India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
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