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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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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 ...
Thursday, 09 June 11
INDIKA AIMS TO PRODUCE 31 MILLION TONS OF COAL IN 2011 - THE JAKARTA POST
The Jakarta Post, a leading English news paper in Indonesia reported that, PT Indika Energy Tbk, an integrated energy company, is targeting to incre ...
Wednesday, 08 June 11
BAYAN TO DISTRIBUTE RP. 80 ( APPROX. US$ 0.00939850) PER SHARE DIVIDEND
Coal miner PT Bayan Resources Tbk (BYAN), that is controlled by business Dato' Low Tuck Kwong, will distribute Rp80 a share dividend or Rp266.7 bil ...
Wednesday, 08 June 11
CBM PRODUCTION FROM AUSTRALIA, CHINA, INDIA, AND INDONESIA IS EXPECTED TO WITNESS A SIGNIFICANT INCREASE BY 2015
Press Release - According to Global Data (December 2010), CBM production in Australia, China, India, and Indonesia is expected to witness a signific ...
Sunday, 05 June 11
COAL IMPORTS BY CHINA IS LIKELY TO INCREASE - VISTAAR SINGAPORE
COALspot.com - The freight market softened this week except for the BDI and Cape index was up, but even in these sectors the momentum was compared t ...
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- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- The University of Queensland
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
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