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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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Friday, 01 April 11
SUPRAS EX RICHARDS BAY COAL TERMINAL TO INDIA HOVERING AT $ 25 - 27.00 PMT - FEARNBULK
Handy
Atlantic markets remain stable with more activity from the Black Sea to FEast paying in the mid 20´s on Supras. The USG remains firm p ...
Friday, 01 April 11
DRY BULK MARKET WEAKENS ON SLOWER DEMAND, HOPES FOR MID-TERM REBOUND ON JAPANS RECONSTRUCTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected in the Baltic Dry Index (BDI) retreated for a third day yesterday, after staying flat on Monday, to end at 1,530 p ...
Wednesday, 30 March 11
CHALLENGER SIGNS OPTION AGREEMENTS TO PURCHASE FOUR COAL PROJECTS IN INDONESIA
Challenger Signs Three Exclusive Option Agreements to Purchase Four Coal Projects in East Kalimantan, Indonesia
Challenger Deep Resources Corp.ha ...
Wednesday, 30 March 11
KPCL TO IMPORT ONE MILLION TONS OF 6300 GAD COAL
COALspot.com - Karnataka Power Corporation a state utility of Karnataka, India called for open tender for supply of one million tons of 6300 Kcal/kg ...
Wednesday, 30 March 11
WIKA GRABS PROJECT FROM ADARO INDONESIA - INSIDER STORIES
One of Indonesia's largest thermal coal PT Adaro Indonesia has finally mandated PT Wijaya Karya Tbk (WIKA) as a contractor to install and manage ov ...
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- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
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