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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, 01 March 11
GANGAVARAM PORT, AN INDIAN MODERN PORT CREATES RECORD
COALspot.com - Gangavaram Port, the deepest and the most modern port in India creates yet another record by discharging 65349 MT Coking Coal in 24 h ...
Monday, 28 February 11
COAL INDIA HIKES PRICES BY 12% FOR SELECT CONSUMERS - ECONOMIC TIMES
Economic Times reported that, Coal India has raised prices by an average 12% for some of its consumers from Sunday, boosting its revenue by 6,000 cr ...
Saturday, 26 February 11
CIL TO HIKE COAL PRICES BY 15 PC FROM TONIGHT - THE TIMES OF INDIA
The Times of India reported that, an Indian State-run coal producer, Coal India will raise the price of coal on an average by about 15 per cent with ...
Saturday, 26 February 11
SUPRAMAX INDEX WAS UP ABOUT 10 PERCENT THIS WEEK - VISTAAR
COALspot.com - The market started on a weak note and seemed to have lost the momentum seen the previous week. The main sectors affected were Cape an ...
Saturday, 26 February 11
PEABODY ENERGY ENTERS INTO COAL SOURCING AGREEMENT ACCESSING INDONESIAN COAL FOR EXPORT
Peabody Energy today said it has entered into an agreement with Indonesia's PT Cahaya Energi Mandiri (CEM) to source 2 million tons of coal for Asi ...
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- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- The University of Queensland
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
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