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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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Monday, 27 December 10
HUNT FOR OVERSEAS COAL ASSETS TO INTENSIFY - FINANCIAL EXPRESS
Financial Express reported that, With the Indian economy back on the track after the slowdown, merger and acquisition (M&A) activities in the re ...
Monday, 27 December 10
RIO TINTO EYES AUSTRALIAN COAL MINER - RTE NEWS
Global resources giant Rio Tinto has made a $3.9 billion bid for Australian coal miner Riversdale.
RTE News reported that, Global resources giant ...
Sunday, 26 December 10
ANGLO SELLS AUSTRALIAN COAL ASSETS - BARCELONA NEWS
Barcelona News reported that, Anglo American has sold off undeveloped Australia coal assets for $577 million.
The global resources giant ha ...
Saturday, 25 December 10
FREIGHT MARKET - LOWEST FIXTURES REPORTED SINCE MID 2009 - CAPT. REDDY
COALspot.com - We wish you a Merry Christmas and a Happy New Year 2011.
The holiday season seems to have severely affected the fr ...
Friday, 24 December 10
CIL SHORTLISTS 21 FIRMS TO IMPORT 250 MT COAL - THE HINDU
The Hindu reported that, Coal India plans to import about 250 million tonnes (mt) over the next 10 years to meet the country's growing requirement. ...
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- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
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