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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, 05 July 11
UNTR REVISES UP SALES TO 7,500 UNITS - INSIDER STORIES
PT United Tractors Tbk (UNTR), distributor of Komatsu heavy equipment and parent of PT Pamapersada Nusantara, has revised up its equipment sales tar ...
Sunday, 03 July 11
INDONESIAN GOVERNMENT HAS CLEARED 1509 COAL IUP'S AS CLEAR AND CLEAN
COALspot.com - The Directorate general of mineral & coal of Indonesia has cleared around 1,509 IUP holders (coal mining companies) as "clea ...
Sunday, 03 July 11
MONSOON IN INDIA PUSHED FREIGHTS UP FROM INDONESIA TO WC INDIA - VISTAAR
COALspot.com - The BDI continued to hold closing just 2 points below last week at 1,422 points which was supported by Cape index which was up by 71 ...
Friday, 01 July 11
BEN LINE OPENS A NEW OFFICE IN BERAU
COALspot.com - Ben Line Agencies has announced that it has opened a new office in the busy coal loading port of Berau in East Kalimantan increasing ...
Friday, 01 July 11
CAPESIZE RATES TO REMAIN DEPRESSED IN COMING MONTHS SAYS SHIPPING ORGANIZATION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In a recent report, BIMCO reassessed that Capesize freight rates will remain in depressed territory in the coming months. Capesize Time Charter Aver ...
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- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
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