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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, 31 December 10
STC TO FINALIZE 12 MILLION MT OF COAL IMPORT CONTRACT TO TWO INDIAN AND A DUBAI BASED COAL TRADER - SOURCES
COALspot.com - World's single largest coal import tender floated by STC on behalf of state utility NTPC to finalize its suppliers or already finali ...
Thursday, 30 December 10
DRY BULK MARKET STAYS SUBDUED AT THE END OF 2010 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dy bulk market failed to cheer ship owners across the board as the year draws to an end, thus bringing mixed feelings ahead of 2011. On one hand ...
Thursday, 30 December 10
KANGAROO RESOURCES BUYS INDONESIAN COAL COMPANY
Australian-listed Kangaroo Resources Ltd. said Wednesday it will buy 99% of the Pakar thermal coal project in East Kalimantan, for A$277 million thr ...
Wednesday, 29 December 10
WEATHER IMPACTS RIO TINTO COAL AUSTRALIAS QUEENSLAND OPERATIONS
Press Release - As a result of severe monsoonal rain in central and northern Queensland, force majeure has been declared on coal sales contracts fro ...
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Indika Energy - Indonesia
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- Standard Chartered Bank - UAE
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- Mjunction Services Limited - India
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Singapore Mercantile Exchange
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- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
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- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Economic Council, Georgia
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
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- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
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- Coalindo Energy - Indonesia
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- Sical Logistics Limited - India
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
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- Parry Sugars Refinery, India
- White Energy Company Limited
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- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
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- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Planning Commission, India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- The University of Queensland
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
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