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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, 03 August 11
DRY BULK MARKET SINKS TO THREE-MONTH LOWS, BUT CAPESIZES COULD TURN THINGS AROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on falling this week, on the back of slow cargo demand amid the summer season. Yesterday, the BDI (Baltic Dry Index), the i ...
Tuesday, 02 August 11
INDONESIA BECOMES SECOND LARGEST COKING COAL EXPORTER
COALspot.com - Indonesia, the largest thermal coal exporter in the world now becomes second biggest coking coal exporter to Japan. Indonesian’ ...
Tuesday, 02 August 11
5TH ASIA PACIFIC COAL TRADING & INVESTMENT OUTLOOK TO PRESENT LATEST TRENDS
Press Release - Global commodities prices have been staying high since the beginning of 2011, resulting in the “TENSION” in various coun ...
Tuesday, 02 August 11
REALM RESOURCES TO ACQUIRE A 75% INTEREST IN THE KATINGAN RIA COAL PROJECT
COALspot.com - Scoping study at the Katingan Ria Coal Project, Central Kalimantan demonstrates positive technical and financial potential for the pr ...
Tuesday, 02 August 11
COAL INDIA TO INVEST IN GOLDEN ENERGY MINES
COALspot.com - Golden Energy Mines, part of PT Dian Swastatika Sentosa Tbk’s, is still negotiating with several strategic investors to o ...
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- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
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