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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, 25 May 11
DRY BULK MARKET ENTERS WEEK ON A HIGH NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has managed to end its downward trend of the past few weeks and surge back on higher ground. Yesterday, the Baltic Dry Index (BD ...
Monday, 23 May 11
BRMS IS TO START PRODUCTION FROM DAIRI PRIMA MINERALS
COALspot.com - The Presidential Decree No. 28 Year 2011 that allows conditional underground mining in the protected forest areas was issued on 19th ...
Sunday, 22 May 11
INDONESIA - INDIA IS LIKELY TO BE STEADY NEXT WEEK - VISTAAR SINGAPORE
COALspot.com - The freight market remained soft beginning of the week, however second half of the week was firm with BDI up by 3.29 pct and closed a ...
Saturday, 21 May 11
OWNERS PREFER TO DO INDO COAL OR NICKEL ORE TO CHINA RATHER THAN GOING TO INDIA - FEARNBULK
Handy
The Atlantic is marked by volatility and very positional, nevertheless USG,NCSA, Cont remain strong thanks to the petcoke, grains and scrap ...
Friday, 20 May 11
GOVT TOLD TO LIMIT COAL, GAS EXPORTS - THE JAKARTA POST
The Jakarta Post, a leading news paper in Indonesia, reported that, Amid soaring global oil prices, the government should limit exports of coal and ...
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- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Australian Coal Association
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Carbofer General Trading SA - India
- MS Steel International - UAE
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