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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, 08 February 11
PUSTAKA JAYA PALU POWER LOOKING FOR 5800 GAD COAL
COALspot.com - According to market information, PT Pustaka Jaya Palu Power, a power plant operator of the Mpanau plant, Palu, Sulawesi has invited c ...
Tuesday, 08 February 11
BAYAN, KANGAROO EXTEND DUE DILIGENCE
Coal miner controlled by businessman Dato' Low Tuck Kwong PT Bayan Resources Tbk (BYAN) and Australia-listed coal company Kangaroo Resources Limite ...
Tuesday, 08 February 11
DRY BULK: IS THE TIDE TURNING? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what could be perceived as a change of market sentiment for the better, the dry bulk industry’s benchmark, the Baltic Dry Index (BDI) poste ...
Monday, 07 February 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 13.03 PERCENT IN FEBRUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the February 2011 Indonesian Coal Reference Price for therma ...
Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driv ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Parliament of New Zealand
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
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