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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, 19 April 11
LONDON COMMODITY BROKERS OPENS JOHANNESBURG OFFICE
COALspot.com - London Commodity Brokers (LCB), a broking house specialising in bulk physical and Over-The-Counter commodities and options (coal ...
Tuesday, 19 April 11
TNPL TO CONDUCT E-AUCTION TO SECURE 160,000 MT OF COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL) a state utility of Tamil Nadu, India to conduct reverse auction on 20 April 2011, betw ...
Tuesday, 19 April 11
ADARO TO ALLOT US$100 MIO FOR COKING COAL - INSIDER STORIES
One of Indonesia's largest coal miner PT Adaro Energy Tbk (ADRO) plans to spend US$100 million in coking coal project dubbed IndoMet Coal, a joint ...
Tuesday, 19 April 11
KPCL TO OPEN PRICE BID ON 23 APRIL 2011 TO FINALIZE ITS ONE MILLION MT COAL SUPPLIER
COALspot.com - Karnataka Power Corporation (KPCL) a state utility of Karnataka, India called for open tender for supply of one million tons of 6300 ...
Monday, 18 April 11
INDONESIA HAS SET THE APRIL 2011 COAL REFERENCE PRICE FOR THERMAL COAL AT US$ 122.02 PER TON
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the April 2011 Indonesian Coal Reference Price for thermal coal at ...
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- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Australian Coal Association
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
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