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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, 08 January 11
DIFFICULT YEAR FOR SHIPPING - TRANSPORT WEEKLY
Transport Weekly reported that, Shipping Corporation of India (SCI) chairman Sabyasachi Hajara says 2011 will be a difficult year because an excess ...
Saturday, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
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- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
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