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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, 15 January 11
SUPRAMAX VESSELS FIXED AROUND $ 8K FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The BDI continues to drop and has touched below 1,500 points with the cape index severely affected with the index touching 1,595 poin ...
Saturday, 15 January 11
MAKE SACRIFICES TO SAVE PLN, INDONESIA GOVT BEGS MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Darwin Zahedi Saleh, Indonesia's minister of energy and mineral resources, on Friday appealed to local coal compan ...
Saturday, 15 January 11
RISING PRICES, GOVERNMENT DECREE LEAVE PLN AT LOGGERHEADS WITH COAL FIRMS - THE JAKARTA GLOBE
The Jakarta Globe reported that, As coal prices continue to increase, state utility Perusahaan Listrik Negara faces problems in securing enough coal ...
Thursday, 13 January 11
SURGING COAL PRICES UNDERMINE PLN'S EFFICIENCY PROGRAM - THE JAKARTA POST
The Jakarta Post reported that, The soaring global coal prices are undermining state electricity company PT PLN's pledge to improve its operational ...
Thursday, 13 January 11
SPML INFRA TO DOUBLE INDONESIA COAL MINE OUTPUT IN TWO YEARS - DNA INDIA
DNA India reported that, Kolkata-based infrastructure company SPML Infra, formerly Subhash Projects & Marketing Ltd, will in two years nearly do ...
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- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Economic Council, Georgia
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- The University of Queensland
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
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