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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, 30 April 11
BUKIT ASAM PROFIT HAS JUMPS 108 PERCENT IN Q1, 2011
The Indonesian state-controlled coal miner PT Bukit Asam Tbk (PTBA) reported a 108.07 percent jump in net profit during the first three months of 20 ...
Saturday, 30 April 11
THE PANAMAX WAS THE BIGGEST GAINER
COALspot.com - The freight market appeared to recover slightly after the Easter holidays. However they market may not move up much and likely to mai ...
Friday, 29 April 11
KOMIPO ISSUES TENDER FOR 710,000 MT OF LCV & HCV COAL
COALspot.com - Korea Midland Power Co. Ltd (KOMIPO) has issued a spot supply tender for supply of total 710,000 MT of thermal coal for delivery betw ...
Friday, 29 April 11
HARUM EYES IDR 2.58 TRILLION COAL TAKEOVER
PT Harum Energy Tbk (HRUM), that is controlled by Indonesian tycoon Kiki Barki, is poised to spend Rp 2.58 trillion (approximately US$ 301.296 mln) ...
Friday, 29 April 11
CHINA'S IMPORTS 27 PERCENT LESS COAL IN Q1 2011 - ICAP SHIPPING
ICAP Shipping reported that, China's coal imports in the first quarter were some 27% down on a year ago at 32.3 Mt (2010: 44.4 Mt). Part of the rea ...
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- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
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