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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, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
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- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- The University of Queensland
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
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