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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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Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
Tuesday, 04 January 11
DRY BULK MARKET TO RANGE BETWEEN 1,700 AND 2,600 POINTS IN THE FIRST QUARTER OF 2011, ANALYSTS SAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As we entered 2011, ship owners and analysts, as well as shipbrokers are looking into their “crystal balls” to try to decode the dry bul ...
Monday, 03 January 11
TAXATION FOR COAL MINING COMPANIES IN INDONESIA - A TAX EXPERTS VIEW
COALspot.com - Mrs. Sri Wahyuni Sujono, managing partner of SF Consulting has wrote an exclusive report regarding taxation for coal mining companies ...
Sunday, 02 January 11
JAISWAL TO SEEK COAL MINES IN AFRICA - HINDUSTAN TIMES
Coal Minister Sriprakash Jaiswal will talk with his counterparts in South Africa and Mozambique during his visit from January 5 to secure coal asset ...
Saturday, 01 January 11
COAL PRODUCTION EXPECTED TO EXCEED 340 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce 340 million tons of coal in 2011, an increase of 23 percent from 275 millio ...
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- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- PTC India Limited - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
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