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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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Monday, 14 March 11
IRON ORE TRADING WORLD EUROPE 2011
Press Release - Strategy and opportunity for miners, steelmakers, end users and the financial community.
The iron ore spot market is growing at a ...
Sunday, 13 March 11
COAL NO LONGER A CHEAP ENERGY SOURCE - THE SUNDAY LEADER
The Sunday Leader reported that, the addition of power generated through coal power to the country’s national grid was initially expected to r ...
Sunday, 13 March 11
THE FREIGHT MARKET SEEMS WILL BE FIRM FOR MARCH AND APRIL - VISTAAR
COALspot.com - The freight market continued to rise with the BDI crossing 1500 points and the cape size index up by 32 pct and all other segments al ...
Friday, 11 March 11
THE HANDY MARKET IS QUITE VOLATILE
Handy
Lacklustre week as the USG is the only bright light with high volumes of petcoke/coal into the Med (paying mid 20´s bss aps USG). Litt ...
Thursday, 10 March 11
DRY BULK MARKET SHOWING SIGNS OF STRONGER RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market jumped by 3.37% yesterday, with the industry’s benchmark, the Baltic Dry Index (BDI), moving up to 1,472 points, levels no ...
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- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- GMR Energy Limited - India
- Parliament of New Zealand
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- The University of Queensland
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
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