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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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Monday, 20 June 11
KPCL SETS ALL INDIA & POSSIBLY A WORLD RECORD FOR COAL DISCHARGING
COALspot.com - Krishnapatnam Port has set an all India record for discharging 95,528 tons of steam coal in just 24 hrs using the conventional unload ...
Monday, 20 June 11
5TH ASIA PACIFIC COAL TRADING & INVESTMENT OUTLOOK 2011 IS ON THE WAY
Press Release - Since the beginning of 2011, international commodity price has been in a high level, resulting in “TENSION” of energy co ...
Sunday, 19 June 11
S6 AND S7 ROUTES LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The freight market seemed to be stabilizing and the BDI and Cape index was up marginally and closed at 1,423 points and 1,824 points ...
Sunday, 19 June 11
BUMI 1Q NET PROFIT INCREASES 16.5 PERCENT
PT Bumi Resources Tbk (BUMI), Indonesia's largest coal exporter that is 25% owned by London-listed Vallar Plc, reported a16.49% increase in net pro ...
Friday, 17 June 11
DRY BULK BREATHES SIGH OF RELEAF ON RENEWED CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has caught a sign of relief from the middle of the week onwards, as the BDI (Baltic Dry Index) increased once again yesterday, t ...
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- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- White Energy Company Limited
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
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