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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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Tuesday, 12 July 11
INDONESIAN MINERS PLAN $70M INVESTMENT TO UPGRADE QUALITY OF COAL - THE JAKARTA GLOBE
One of the leading english language news paper in indonesia, the Jakarta globe reported that, as the government implements a ban on the export of po ...
Tuesday, 12 July 11
DRY BULK MARKET BEGINS WEEK ON RETREAT MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was evident by the end of the previous week, the dry bulk market’s growth momentum was about to lose steam, something proven yesterday, whe ...
Monday, 11 July 11
REFLECTIONS ON THE FLEET REACHING ONE BILLION TONNES - CLARKSONS / HELLENIC SHIPPING
“A billion gross tonnes of shipping” has a nice ring to it. It presents the industry as a business of substance, with its 85,000 ships w ...
Sunday, 10 July 11
UNTR PROVIDES US$100 MIO TO TTA - INSIDER STORIES
PT United Tractors Tbk (UNTR) agreed to allocate US$100 million to its coal subsidiary dubbed PT Tuah Turangga Agung (TTA).The US$100 million was pa ...
Sunday, 10 July 11
HARDLY ANY CARGO FROM WC INDIA UNTIL END OF MONSOONS - VISTAAR
COALspot.com - The BDI continued to hold last week and firmed up by 27 points with cape and panama index supporting the BDI.
The BDI closed at 1, ...
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- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- The University of Queensland
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
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