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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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Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
Friday, 28 January 11
MPM SEEKS 40K TONS OF INDONESIAN COAL
An Indian paper producer Mysore Paper Mills Ltd., based in Bangalore is looking for 40,000 metric tons of non-coking coal of Indonesian o ...
Friday, 28 January 11
TRADING PERMIT DELAYS THREATEN EXPORTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, an ongoing wrangle over licenses for mining traders could hurt investment, a coal mining association chief said on ...
Friday, 28 January 11
DRY BULK MARKET CLOSING IN TOWARDS CRISIS LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The trials and tribulations of the dry bulk market seem to have no end during the first month of 2011, as the industry’s benchmark, the Baltic ...
Wednesday, 26 January 11
ADANI TO SET-UP RAIL, PORT AND POWER PROJECTS IN INDONESIA - MONEYCONTROL
Moneycontrol reported that, Adani Enterprises, the flagship company of India’s infrastructure conglomerate the Adani Group, today announced th ...
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- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Minerals Council of Australia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
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