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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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Wednesday, 02 February 11
BAYAN TO SUPPLY COAL TO TP UTILITIES LTD
Insider Stories has reportd that, Indonesia's one of the leading coal miner PT Bayan Resources Tbk (BYAN) owned by businessman Dato' Low Tuck ...
Wednesday, 02 February 11
HUGE TONNAGE OVERSUPPLY LOOMING FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market taking another dive yesterday, to just over 1,000 points (1,084), losing more than 2% on the day, it’s more than obvi ...
Monday, 31 January 11
S. SUMATRA COAL RAILWAY TO BE COMPLETED ON SCHEDULE - THE JAKARTA POST
The Jakarta Post reported that, despite land acquisition problems, state coal mining company PT Bukit Asam is upbeat that the development of a railw ...
Monday, 31 January 11
COAL MINER PTBA TO DRIVE OUTPUT WITH ACQUISITIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, State coal company Perusahaan Tambang Batubara Bukit Asam said its output would increase 34 percent to 17.6 million ...
Saturday, 29 January 11
PRESSURE ON SHIPPING MARKET MAY CONTINUE UNTIL MID FEBRUARY 2011
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1370 points.
In May 2010 the BDI touched 4,209 ...
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- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Xindia Steels Limited - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
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