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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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Wednesday, 15 June 11
DRY BULK MARKET WEAKENS AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite this time of year traditionally being one of the busiest for the dry bulk market, it seems that in the post-crisis era trade patterns are co ...
Monday, 13 June 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 1.2 PERCENT IN JUNE
COALspot.com - The Ministry of Energy & Mineral Resources sets coal spot price benchmark for June 2011 at US$ 119.03 per ton, higher than US$ 1. ...
Sunday, 12 June 11
THE FREIGHT MARKET IS LIKELY TO BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com - The freight market continued to soften this week except for Panamax index. The BDI was down by about 4.77 pct and closed at 1,418 poi ...
Friday, 10 June 11
DRY BULK ON RETREAT MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
This week has offered dry bulk ship owners no real reason to smile, as the industry’s benchmarket, the Baltic Dry Index (BDI) has been steadil ...
Friday, 10 June 11
BUKIT ASAM RECORDED RP1.3 TRILLION PROFIT IN MAY - TEMPO INTERACTIVE
Tempo Interactive reported that, PT PT Tambang Batubara Bukit Asam Tbk (PTBA) made a net profit of Rp 1.3 trillion (approx. US$ 152,779,410) at the ...
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- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
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