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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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Sunday, 06 March 11
THE S6 ROUTE MAY CONTINUE TO BE FIRM - VISTAAR
COALspot.com - The freight market was firm this week with all indices up. The BDI , Cape Index and Panamax index was up by almost 9 pct where as Sup ...
Friday, 04 March 11
IRON ORE FROM INDIA HAS BEEN QUIET
Handy
Activity has been gradually rising in the Atlantic but it is mostly confined to the USG market. Short period basis redelivery Atlantic has b ...
Thursday, 03 March 11
TNPL INDIA LOOKING FOR 160,000 MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Ltd. is seeking to import 160,000 plus minus 5 percent metric tons of non-coking coal with Gross Calo ...
Wednesday, 02 March 11
MIXED FORTUNES FOR DRY BULK OWNERS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although the dry bulk market has been on the positive side this week, things still look quite uncertain in the near term, with most owners puzzled a ...
Wednesday, 02 March 11
INDIA, 2ND LARGEST IMPORTER OF INDONESIAN COAL IN 2010
COALspot.com: Indonesia, the world largest coal exporter, shipped 24.68 million tons of coal in January 2011, which was 1.19 percent higher Y-o- ...
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- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Australian Coal Association
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
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