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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, 20 July 11
DRY BULK MARKET KEEPS ON FALLING ON SOFTENING CONDITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated to lower ground on Tuesday, as the industry’s benchmark, the BDI (Baltic Dry Index) fell to 1,330 points, down b ...
Tuesday, 19 July 11
82 MIO TONS OF COAL TO BE SUPPLIED FOR DOMESTIC MARKET
Indonesian Coal miners were required to supply 82 million tons of coal to Domestic market in this year. This is a 2.53 percent higher than last year ...
Monday, 18 July 11
IMFA BUYS A INDONESIAN COAL MINE FOR USD 8.7 M
Indian Metals and Ferro Alloys (IMFA), the largest producer of ferro chrome in the country, today said it has acquired 70 per cent stake in an Indones ...
Sunday, 17 July 11
THE COAL PRICES ARE SOFTENING DUE TO LESS DEMAND - VISTAAR
COALspot.com: The markets were down last week with BDI down by 6.63 points and closing at 1,353 points. The most affected was Cape index which was d ...
Friday, 15 July 11
DRY BULK MARKET SUFFERS NEW BLOW, RETREATS EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market fell even lower yesterday on the back of lower demand for larger vessels, like Capesizes and Panamaxes. The industry’s ben ...
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- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Planning Commission, India
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- The University of Queensland
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
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