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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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Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
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- Makarim & Taira - Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
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