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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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Sunday, 23 January 11
THE AVERAGE CHARTER RATE FOR CAPE SIZE VESSELS WAS AT $ 8,859 PD ALMOST CLOSE TO 2008 LOWS - VISTAAR
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1,370 points. “ In May 2010 the BDI touched ...
Saturday, 22 January 11
POSSIBLE COAL EXPORT RESTRICTIONS ON INDONESIA UNLIKELY TO AFFECT CHURCHILL MINING - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining moved to reassure investors after a fall in its share price, stating that from talks with the au ...
Thursday, 20 January 11
INDONESIA MAY BAN LOW-QUALITY COAL EXPORTS FROM 2014 - BLOOMBERG
Bloomberg reported that, The Indonesian government plans to ban exports of coal with an energy value of less than 5,600 kilocalories a kilogram star ...
Thursday, 20 January 11
SUPRAS ARE DOING USD 7- 8K FOR INDONESIA-INDIA - FEARNBULK
Handy
Negative sentiment for forward positions in the Atlantic market due to lack of cargo availability and too many ballasters from the East. Con ...
Thursday, 20 January 11
ITMG TARGETS TO PRODUCE 25 MILLION TONS OF COAL THIS YEAR - BISNIS INDONESIA
Bisnis Indonesia reported that, Coal producer PT Indo Tambangraya Megah Tbk (ITMG) targets to produce 25 million tons of coal this year, a 13. ...
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- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Planning Commission, India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
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