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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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Thursday, 24 March 11
INDIA'S CHETTINAD INTERNATIONAL COAL TERMINAL'S PERMISSIBLE DRAFT HAS INCREASED TO 13.5 M
COALspot.com - Chettinad International Coal Terminal in Ennore port has the berth with draft 13.5 Meters now, according to E-Mail statement received ...
Thursday, 24 March 11
DRY BULK MARKET RISES, CAPESIZES GAIN BUT REMAIN LOW EARNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market posted modest gains on Wednesday, with the Baltic Dry Index rising to 1,565 points, up by 1.43 percent on the day, led by gains ...
Wednesday, 23 March 11
INDIAS TNPL RECEIVED 1.120 MMTS OF COAL AGAINST ITS 160K MT INQUIRY
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. has closed its inquiry today.
Seven Indian coal traders have submitted price bid to sup ...
Tuesday, 22 March 11
MONNET ISPAT & ENERGY LIMITED ACQUIRES INDONESIAN COAL COMPANY THROUGH ITS SUBSIDIARY MONNET GLOBAL LIMITED
Monnet Global Limited (MGL) acquires PT Sarwa Sembada Karya Bumi, Sumatra & on part exploration the reserves of 65 million tonne on Thermal Coal ...
Tuesday, 22 March 11
RI COAL EXPORTS TO JAPAN MAY BE DIVERTED TO OTHER COUNTRIES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s coal exports to Japan will likely be diverted to other countries for several months after the rece ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Australian Coal Association
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
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