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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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Tuesday, 17 May 11
DRY BULK MARKET ENTERS WEEK ON WEAK MODE - HELLENIC SHIPPING
In yet another sign of softening freight rates for dry bulk carriers and oversupply issues, the dry bulk market entered this week on a downward path ...
Monday, 16 May 11
INDO TAMBANG 1Q SALES REVENUE UP - INSIDER STORIES
Thai Banpu Plc last week reported a 7.83% increase in coal sales revenue from its Indonesian operating unit via PT Indo Tambangraya Megah Tbk (ITMG) ...
Sunday, 15 May 11
THE FREIGHT MARKET REMAINED SOFT - VISTAAR
COALspot.com - "The freight market overall remained soft", said Capt. Reddy, Director of Vistaar Shipping Singapore. He further added, &qu ...
Saturday, 14 May 11
WELSPUN TO ACQUIRE AN INDONESIAN COAL MINE - MEDIA
The India based Welspun Power and Steel Ltd is planning to acquire 456,000 shares in PT Batubara Energy Indonesia, representing 75% interest, accord ...
Saturday, 14 May 11
DRY BULK MARKET ON A DOWNFALL ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what is now pretty clear will be yet another challenging year for dry bulk ship owners, the Baltic Dry Index returned to its usual pattern of dec ...
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- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- PTC India Limited - India
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
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