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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, 10 May 11
DRY BULK MARKET KEEPS ON RISING, OUTLOOK MIXED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward once again on Monday, with the Baltic Dry Index rising by 0.6% to 1,348, although the Capesize market was 0.57% l ...
Monday, 09 May 11
THAILAND COAL IMPORTS SURGE IN Q1 - ICAP SHIPPING
Thailand's coal imports leapt 20% in Q1 and the country looks set to import its largest ever volume in 2011 as quoted by ICAP Shipping web site.
...
Monday, 09 May 11
KOSPO SEEKING 65KT STEAMING COAL
COALspot.com - Korea Southern Power Co (KOSPO) issues tender for 65000 Mt of Steaming Coal Supply with a minimum CV of 4,500 kcal/kg on NAR basis. D ...
Monday, 09 May 11
INDONESIA HBA FALL BELOW $118
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the May 2011 Indonesian Coal Reference Price for thermal coal at US$ 11 ...
Monday, 09 May 11
DIAN SWASTATIKA Q1 PROFIT SOARS 511 PERCENT - INSIDER STORIES
PT Dian Swastatika Sentosa Tbk (DSSA), parent of coal miner PT Golden Energy Mines, reported a 511.73% jump in net profit for the first quarter of t ...
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- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
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