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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, 22 March 11
KRISHNAPATNAM PORT SETS ALL INDIA RECORD FOR COAL DISCHARGING
COALspot.com - "Krishnapatnam Port has set an all India record for discharging 71,587 tons of steam coal in just 24 hrs using the conventional ...
Sunday, 20 March 11
FREIGHT MARKETS COULD SOFTEN NEXT WEEK DUE TO JAPANESE PORTS CLOSURE AND LIBYAN CRISIS - VISTAAR
COALspot.com - The BDI was down by 1.98 pct (closing at 1531 points) mainly due to Cape index which was down by almost 11 pct and closed 1687 points ...
Friday, 18 March 11
FALL IN INDONESIAN COAL EXPORTS IN FEBRUARY 11
COALspot.com - Indonesian coal exports seen a fall of 10.76% during Feb 2011. The world’s largest coal exporter shipped 22.029 MMts of c ...
Thursday, 17 March 11
THE PACIFIC HANDY MARKET IS CURRENTLY STEADY - FEARNBULK
Handy
The Atlantic market is showing signs of recovery and does not seem to be affected by the Japan disaster. The market is very positional and i ...
Tuesday, 15 March 11
COAL PRODUCTION FORECAST TO SURGE ON RISING PRICES - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal production is forecast to increase by 20 percent this year as coal prices continue to ...
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- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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