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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, 30 June 11
DRY BULK MARKET SHOWS SIGNS OF FURTHER WEAKENING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems to be unable to shake off the additional supply of vessels, an oversupply issue of grave concern that would have occured e ...
Wednesday, 29 June 11
ANOTHER STRONG PERFORMANCE BY CAPESIZE - BRS
Another strong performance by the Capesize market this week, bringing the BCI up 8% to 1,974 points. However the Panamax market was penalised, losin ...
Monday, 27 June 11
THE IRON ORE IMPORTS BY CHINA SEEMED TO SLOW DOWN - VISTAAR
COALspot.com - The BDI was holding as previous week and was just up by 1 point and closed at 1424 points end of last week. The biggest gain was ...
Friday, 24 June 11
THE INDONESIAN GOVERNMENT WILL NOT EXTEND ALL EXPIRED MINING CONTRACTS - JAKARTA UPDATES
The Indonesian Government have decided not to extend all mining concessions under the scheme called Contract of Work and instead will take over the ...
Friday, 24 June 11
BERAU EYEING 70 PERCENT GROWTH IN EBITDA
Indonesia's coal producer PT Berau Coal Energy Tbk (BRAU) is eyeing a 60 -70 percent growth in EBITDA to US$ 560 million-US$595 million this year. ...
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- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- The University of Queensland
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- PTC India Limited - India
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
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