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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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Monday, 10 January 11
COAL MONGOLIA IS INVITING YOU TO THE INTERNATIONAL COAL SECTOR INVESTORS CONFERENCE
COALspot.com - (Press Release) - The Coal Mongolian Conference will take place at Chinggis Hotel, in Ulaanbaatar on 24-25, Feb 2011. The coal bonanz ...
Monday, 10 January 11
DEWA SEEKS ADVICE ON COAL POWER PROJECT -THE NATIONAL
The Dubai utility company gets nine bids from international groups for consultancy role.
The National reported that, Dubai's utility company wil ...
Saturday, 08 January 11
COAL PRICE WILL RISE IN SHORT-TERM DUE TO AUSTRALIA FLOODS - ALBUQUERQUE EXPRESS
Albuquerque Express reported that, Queensland’s mining minister, Stephen Robertson, has warned that the Australian state’s coal mines wi ...
Saturday, 08 January 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 8.69 PERCENT IN JANUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the January 2011 Indonesian Coal Reference Price for thermal ...
Saturday, 08 January 11
SUPRAMAX VESSELS WERE FIXED AT AROUND $ 9000 PD FOR A TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The holiday season affect combined with severe flooding in Queensland ports continues to keep the market and pressure. “Suprama ...
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- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
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