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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, 07 February 11
RICHARDS BAY COAL TERMINAL EXPORTS SURGE, BUOYED BY ECONOMIC DEVELOPMENT IN CHINA AND INDIA
COALspot.com - Richards Bay Coal Terminal (RBCT) announced today that 2010 exports have exceeded the last two years’ performance, said in a re ...
Monday, 07 February 11
RBCT SHIPPED 28.67 PERCENT LESS COAL IN JANUARY
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest export coal terminal in the world, shipped 4,389,925 MT of coal in January 20 ...
Sunday, 06 February 11
THE PANAMAX & SUPRAMAX FUTURES FOR 2011-2013 WAS AT AROUND US$ 16,500 & US$ 15,000 PER DAY RESPECTIVELY
COALspot.com - With the Chinese new year holidays this week, the market has been fairly quite as expected.
The BDI saw a bigger drop compared to ...
Saturday, 05 February 11
INDONESIAN ENERGY MINISTER HAS SIGNED A DECREE FOR COAL TRANSPORTATION PERMITS ON FRIDAY
COALspot.com - Minister of Energy, Darwin Minister Saleh said, that, he had signed a decree for transportation and sale of coal, which was the ...
Saturday, 05 February 11
ANCHORAGE LOADING POINT MOVED TO MUARA JAWA
COALspot.com - The Ministry of Transportation Republic Indonesia has announced that, the loading point at Muara Berau, East kalimantan h ...
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- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
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