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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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Thursday, 21 July 11
DRY BULK RATES EDGE FURTHER DOWN ON WEAK MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market fell once again on Wednesday marking the ninth straight day of losses. The industry’s benchmark, the Baltic Dry Index (BDI ...
Wednesday, 20 July 11
ANTWERP RECEIVES THE CAPESIZE MG COURAGE
The deepening of the Western Scheldt has made the port of Antwerp easily accessible not only to Ultra Large Container Ships of over 10,000 TEU but a ...
Wednesday, 20 July 11
KALIMANTAN GOLD APPOINTS COMMISSIONER TO SUBSIDIARY
Kalimantan Gold Corporation Limited has announced the appointment of Dr. Bambang Setiawan as Commissioner (a senior advisor) to the Board of PT Kali ...
Wednesday, 20 July 11
CHALLENGER GETS TABANG PROJECT IUP PERMIT
COALspot.com - Challenger Deep Resources Corporation has been getting exploration permit or Izin Usaha Pertambangan (IUP) for its Tabang coal in Eas ...
Wednesday, 20 July 11
TCM COAL PROJECT IN SOUTH KALIMANTAN MOVES TO FINAL FEASIBILITY STUDY
COALspot.com - Pan Asia Corporation Ltd has executed a formal agreement with an underground mining group KOPEX to undertake a final feasibilit ...
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- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Planning Commission, India
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Australian Coal Association
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
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