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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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Wednesday, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
Wednesday, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
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- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- MS Steel International - UAE
- The University of Queensland
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
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