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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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Saturday, 26 March 11
FLSMIDTH WINS MULTIMILLION DOLLAR MATERIAL HANDLING PROJECT IN INDONESIA
FLSmidth has signed a contract in Jakarta worth in excess of USD 135m (DKK 700m) with PT Adaro Indonesia, a subsidiary of PT Adaro Energy Tbk., to s ...
Saturday, 26 March 11
ADARO AIMS TO DOUBLE COAL PRODUCTION -THE JAKARTA POST
The Jakarta Post reported that, coal producer PT Adaro Indonesia is planning to soon boost its production capacity to 80 million tons annually, almo ...
Friday, 25 March 11
KNOWLEDGE INFRASTRUCTURE TO BAG 160,000 MT COAL SUPPLY ORDER FROM TNPL
COALspot.com - Delhi based Knowledge infrastructure Systems Pvt. Ltd offered lowest price of US$ 97.10 per metric ton for calorific value of 6000 GA ...
Friday, 25 March 11
THE CAPESIZE MARKET CONTINUED TO FALL - FEARNBULK
Handy
The Atlantic market remains stable with more activity from the Black Sea to Feast paying in the mid 20´s on supras.
The USG remain ...
Friday, 25 March 11
BORNEO ENERGI FY10 NET INCOME SOARS - INSIDER STORIES
Coking coal producer PT Borneo Lumbung Energi Tbk (BORN) booked a skyrocket net income by 499.72% from net loss position in 2009, as quoted by Insid ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- The University of Queensland
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
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