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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, 21 December 10
CHINA COAL CAP TO BOOST GLOBAL M&A - FINANCIER WORLD WIDE
Financier World Wide reported that, Chinese state-run media has reported that the Central Government intends to cap domestic coal production for fea ...
Tuesday, 21 December 10
CIL TOLD TO SCOUT MINES ABROAD TO BRIDGE COAL DEFICIT - ECONOMIC TIMES
Economic Times reported that, The government asked state-owned CIL to look for acquiring assets abroad to meet the domestic shortfall of coal.
&q ...
Tuesday, 21 December 10
SHIPPING INDUSTRY RECOVERING, BUT STILL HAMPERED BY OVERSUPPLY OF VESSELS AND DEPRESSED FREIGHT RATES - UNCTAD / HELLENIC SHIPPING
International seaborne trade contracted by 4.5 per cent in 2009, reports UNCTAD´s Review of Maritime Transport 2010 . That decline put seaborn ...
Sunday, 19 December 10
SPOT SUPRAMAX VESSELS WERE FIXED AROUND US$ 13,000 PER DAY FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The freight market continued to be soft with the BDI down by 96 points and closed at 1,999 points, touching below 2,000 points on Fri ...
Friday, 17 December 10
THE PANAMAX MARKET HAS EXPERIENCED A SOFTER TENDENCY THIS WEEK - FEARNBULK
Handy
Monotonous Atlantic markets with little fresh enquiry in Black Sea/Med/Continent. Large Supras are achieving usd 21/22k for TA rounds - 2/3 ...
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- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Economic Council, Georgia
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- PTC India Limited - India
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
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