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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, 07 May 11
BERAU INKS DEALS WITH CHINESE FIRMS AS COAL WEATHERS COMMODITIES STORM - THE JAKARTA GLOBE
The Jakarta Globe reported that, Berau Coal, one of the country’s largest coal miners, has signed sales contracts with two Chinese companies a ...
Saturday, 07 May 11
SUPRAMAXES ARE AT AROUND $ 13,500-14,000 PER DAY FOR SINGLE TRIPS
COALspot.com - The freight remained fairly steady this week with the BDI up by 71 points and closing at 1,340 points, said Capt. Reddy, the director ...
Saturday, 07 May 11
COAL PRODUCTION MAY REACH 95M TONS IN SECOND QUARTER - THE JAKARTA POST
The Jakarta Post reported that, Indonesian miners are projected to produce around 95 million tons of coal in the second quarter of this year after l ...
Friday, 06 May 11
BUKIT ASAM TO CLOSE COAL TAKEOVER IN Q2 - INSIDER STORIES
The state-controlled PT Tambang Bukit Asam Tbk (PTBA) expects to complete acquisition of two coal mining companies from four companies which is now ...
Thursday, 05 May 11
SUPRAS IN NORTH CHINA ARE GETTING CLOSE TO $ 13K FOR INDO-INDIA
Handy
The Atlantic market is stable/flat with positive undertone meaning more enquiries hitting the market today. Lack of prompt vessels. Trips to ...
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- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Australian Coal Association
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- White Energy Company Limited
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
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