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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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Wednesday, 17 August 11
TAVESCO KILLARA ENERGY TO ACQUIRE COAL CONCESSIONS IN EAST KALIMANTAN
COALspot.com - Killara Resources Limited, an Australian listed company has formed PT Tavesco Killara Energy (TKE), a joint company with PT Tavesco I ...
Wednesday, 17 August 11
BUMI'S H1 UNDERLYING OPERATING PROFIT $62 MILLION
COALspot.com - Bumi PLC , posted underlying first-half operating profit of $62 million and production at PT Bumi Resources and PT Berau increased to ...
Wednesday, 17 August 11
SHIP OWNERS COULD FACE PAIN ON THE BACK OF GLOOMY ECONOMYS PREDICTIONS - HELLENIC SHIPPING
The latest market turmoil, coupled with the renewed risk of a global recession could very well signal more troubled times for ship owners of all shi ...
Tuesday, 16 August 11
CHALLENGER ENTERED INTO CSPA WITH PELANGI KERTANEGARA TO ACQUIRE 100% STAKE
COALspot.com - Challenger Deep Resources Corp., through its wholly owned subsidiary, P.T. Bestindo Energy, has exercised its option to purchase an a ...
Monday, 15 August 11
ADARO ENERGYS NET INCOME MORE THAN DOUBLES IN FIRST HALF 2011
COALspot.com - Indonesian’s second largest coal producer, Adaro Energy, booked net profit US$ 268 million in the first half 2011, rose two-fol ...
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- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
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