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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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Friday, 15 July 11
BUKIT ASAM 1H COAL SALES UP 44 PERCENT
The state-controlled PT Tambang Batubara Bukit Asam Tbk (PTBA) is estimated to post 6.5 million tons of coal sales in the first half of this year, a ...
Thursday, 14 July 11
INDO GOVT. SETS JULY COAL REFERENCE PRICE AT US$ 118.24 PER TON
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia sets coal spot price benchmark for July 2011 at US$ 118.24 per ton, US$ 0 ...
Thursday, 14 July 11
DRY BULK MARKET KEEPS FALLING ON WEAK CAPESIZE SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on retreating on Wednesday, with the Baltic Dry Index (BDI) falling to 1,383 points, from 1,411 of the previous day. Capesi ...
Thursday, 14 July 11
UNITED TRACTORS BUYS DUTA SEJAHTERA - INSIDER STORIES
Insider Stories reported that, PT United Tractors Tbk (UNTR), via a wholly-owned subsidiary PT Tuah Turangga Agung, will acquire PT Duta Sejahtera a ...
Wednesday, 13 July 11
ANOTHER FIRMER WEEK FOR THE CAPES - BRS
Barry Rogliano Salles reported that, there were mixed results for the dry bulk market this week: the Capesize and Panamax markets performed well gai ...
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- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
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