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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, 24 December 10
DRY BULK OWNERS COULD SOON RECONSIDER SCRAPPING OLDER VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market close to its lowest levels in months and indeed close to 2010 lows, ship owners could be heading towards scrapyards in a bi ...
Thursday, 23 December 10
SOUTHGOBI RESOURCES CLOSES STRATEGIC INVESTMENT IN ASPIRE MINING LIMITED
Press Release – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878), announced today that it has completed the private placement with Aspire Mining ...
Thursday, 23 December 10
CESC EYES COAL MINES IN INDONESIA, S AFRICA - TEHELKA
Company has already set a target of adding 6,000 MW power generation by the end of the 12th Plan in 2017
Tehelka reported that, CESC Ltd, the fla ...
Thursday, 23 December 10
SANTA CLAUSE DID NOT COME EARLY THIS YEAR - FEARNBULK
Handy
Not much fresh enquiry this week and quite dead in Bl.Sea/Med. Nevertheless  ...
Thursday, 23 December 10
STERLITE ENERGY LIMITED TO BUY 0.6 MLN MT OF COAL FOR 2011
COALspot.com - Sterlite Energy Limited (SEL) is a part of Vedanta Resources plc , a London listed FTSE 100 diversified metals and mining major with ...
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- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
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