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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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Saturday, 28 May 11
WCI-CHINA RATES SLIDED TO 15K AND FROM ECI AROUND 12K - FEARNLEYS AS
Handy
Rates in the Atlantic remain steady/flat with the Black Sea remaining quiet with little fresh enquiries. The Continent is seeing more tonnag ...
Saturday, 28 May 11
GOLDEN MINES IPO AT RP 2,300 - RP 3,500
Coal miner PT Golden Energy Mines, a wholly owned subsidiary of PT Dian Swastatika Sentosa Tbk (DSSA) which is controlled by Indonesian businessman ...
Friday, 27 May 11
LARGER DRY BULK CARRIERS LEAD BDIS RALLY THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Larger dry bulk vessels have kept on leading the market’s rise this week, with the BDI (Baltic Dry Index) rising by a more than healthy 3.43% ...
Wednesday, 25 May 11
70 PERCENT OF HARUMS PRODUCTION SOLD - BISNIS INDONESIA
Coal producer PT Harum Energy Tbk claimed that out of this year's total production target of 10 million tons, 70% or 7 million tons had been sold, ...
Wednesday, 25 May 11
MINERS BACK GOVT PLAN TO FREEZE MINING PERMITS - THE JAKARTA POST
Indonesian coal miners hailed the government’s decision to impose a moratorium on the issuance of new mining permits, saying the freeze would ...
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- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Planning Commission, India
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
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