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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, 29 March 11
JAPAN FACTOR RIPPLING THROUGH THE SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the world watching the latest developments regarding the nuclear crisis in Japan and the devastating effects of the recent tragedy that struck ...
Tuesday, 29 March 11
DUTY EXEMPTION UNLIKELY TO IMPACT COKING COAL PRICES - PTI NEWS
Press Trust of India News reported that, the exemption to certain types of coking coal from customs duty is not likely to impact steel prices at pre ...
Monday, 28 March 11
HARUM ENERGY FY10 EARNING UP 7.23% - INSIDER STORIES
Thermal coal producer PT Harum Energy Tbk (HRUM), controlled by Indonesian businessman Kiki Barki through his son Lawrence Barki, posted a slight in ...
Monday, 28 March 11
IBT RAISES CAPACITY OF PULAU LAUT TERMINAL - THE JAKARTA POST
The Jakarta Post reported that, coal infrastructure and logistics firm PT Indonesia Bulk Terminal (IBT), a subsidiary of PT Adaro Energy Tbk, plans ...
Saturday, 26 March 11
THE FREIGHT MARKET REMAINED A BIT VOLATILE THIS WEEK - CAPT. REDDY
COALspot.com - "The freight market remained a bit volatile this week", says Capt. Reddy, director of Vistaar Shipping Singapore.
Howeve ...
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- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Planning Commission, India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Eastern Energy - Thailand
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