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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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Sunday, 17 April 11
THE FREIGHT MARKET APPEARS WILL CONTINUE TO BE SOFT NEXT WEEK - CAPT. REDDY
COALspot.com - "The freight market continued to soften further with all segments down except for the handy size which was marginally up by 10 p ...
Sunday, 17 April 11
ADARO TO PROPOSE US$75 MILLION DIVIDEND
COALspot.com - One of Indonesia's largest coal miner PT Adaro Energy Tbk (ADRO) is keen to propose a final dividend of US$75 million or Rp 20.17 (U ...
Saturday, 16 April 11
TNPL RECEIVES 1.6MT OF COAL OFFERS - SOURCES
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. has closed its 160,000 MT coal inquiry today.
More than a half a dozen of Indian coal t ...
Friday, 15 April 11
DRY BULK MARKET KEEPS ON FALLING, ON LOW DEMAND AND HIGH SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its falling patern this week, with the industry’s benchmark, the Baltic Dry Index (BDI) retreating again yesterda ...
Thursday, 14 April 11
SUPRAS IN N.CHINA GET CLOSE TO $12000 FOR TRIPS VIA INDONESIA TO INDIA - FEARNBULK
Handy
The Atlantic market remains flat - very little new/fresh business and slow activity. Considerable prompt tonnage remains unfixed. The USG pa ...
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- Mjunction Services Limited - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- The University of Queensland
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
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