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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, 27 April 11
DRY BULK MARKET LACKS ACTIVITY, RATES KEEP RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the Easter Holidays for a large of the world now behind, the dry bulk market kept lacking activity on Tuesday, which led the Baltic Dry Index ( ...
Tuesday, 26 April 11
NTPC CALLS TENDER FOR 4 MLN TON OF NON-COKING COAL
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, is the largest thermal power gener ...
Monday, 25 April 11
THE FUTURES FOR THREE YEARS WAS AT AROUND PANAMAX/US$ 14,000 PER DAY & SUPRAMAX/US$ 14,000 PER DAY - VISTAAR
COALspot.com - The freight market continued to soften further with all segments down except for the handy size which was marginally up by 10 points. ...
Saturday, 23 April 11
GUPTA COAL TO BAG ONE MILLION TONS OF COAL SUPPLY ORDER FROM KPCL AT AROUND US$ 127.53 PMT
COALspot.com - Karnataka Power Corporation (KPCL), a state utility of Karnataka, India has secured its one million tons of thermal coal with c ...
Saturday, 23 April 11
STRAITS ASIA SETS 11.5 MIO TONS OUTPUT - INSIDER STORIES
Insider Stories reported that, Singapore-listed Straits Asia Resources Limited plans to jack up its coal output target of 8.5% to 11.5 million tons ...
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- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- PTC India Limited - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
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