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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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Friday, 11 February 11
DRY BULK MARKET HEATING UP ON FRESH CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is on a high this week, with owners of smaller vessels turning their attention towards the spot market, in order to take advanta ...
Thursday, 10 February 11
SUPRA RATES IMPROVED A LITTLE OVER US$ 6K BSS N. CHINA DELIVERY FOR INDO-INDIA AND THAILAND ROUNDS - FEARNBULK
Handy
Atl is still weak with little fresh enquiry and an accumulation of spot tonnage.Owners are reluctant to send tonnage thru Suez due to uncert ...
Thursday, 10 February 11
BUKIT ASAM EXPECTS ABOVE RP 3 TRIO PROFIT
The state-owned coal miner PT Tambang Bukit Asam Tbk (PTBA) expects to reach 2011's net profit above Rp 3 trillion (US$ 336,322,568) from above Rp2 ...
Wednesday, 09 February 11
INDONESIA ALLOWED 60 COAL TRADING COMPANIES TO EXPORT COAL
COALspot.com - A temporary ban imposed on coal traders in January has lifted this week. As of today 60coal trading companies were allowed to resume ...
Tuesday, 08 February 11
INDIA'S SIMHAPURU TARGETS S.AFRICAN COAL - ECONOMIC TIMES
Economic Times reported that, India's Simhapuri Energy , a unit of the Madhucon Group , wants to buy new or existing collieries in South Africa fro ...
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- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
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