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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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Monday, 15 August 11
INDIAS MALABAR CEMENTS SEEK TO IMPORT 40,000 TONS OF COAL
COALspot.com - Malabar Cements Ltd., India's Keralaa government owned cement factory is seeking to import 40K metric tons of non-coking coal throug ...
Sunday, 14 August 11
SUPRAMAX CHARTER RATES SHARPLY UP - CAPT.REDDY
COALspot.com - The BDI ended positive with gains in Cape and Panamax index. The BDI was up by 1.50 pct and the cape and panamax index was up by almo ...
Saturday, 13 August 11
GMR HAS ENTERED INTO CSPA WITH GEMS TO ACQUIRE 30% STAKE
COALspot.com - GMR Infrastructure Investments (Singapore) Pte Ltd, a subsidiary of GMR Infrastructure, has signed conditional sale and purchase agre ...
Friday, 12 August 11
COAL MINERS WILL ALLOW TO CONSTRUCT MINE MOUTH POWER PLANT
COALspot.com - The government is set to draft a regulation to enable construction of steam-fired power plants (PLTU) by coal mining companies for th ...
Friday, 12 August 11
CAPESIZE DEMAND HELPS LIFTING OF DRY BULK MARKET - HELLENIC SHIPPING NEWS
The dry bulk market has recovered a small fraction of its lost ground this week, with higher returns as a result of increased capesize demand. This ...
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- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Australian Coal Association
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- The University of Queensland
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
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