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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, 17 December 10
NALCO SHORTLISTS COAL FIRMS FOR INDONESIA PROJECT - BUSINESS-STANDARD
Business-Standard reported that, State-owned NALCO today said it has shortlisted two firms for supply of coal for its Rs 18,000-crore (US$ 3,953,003 ...
Thursday, 16 December 10
LANCO BAGS AUSTRALIAN COAL MINER GRIFFITH - DNA
As part of its strategy to secure coal supplies for meeting its needs in expanding power generation capacities, infrastructure major Lanco Infratech ...
Thursday, 16 December 10
COAL INDIA IN TALKS WITH INDONESIAN CO TO BUY ITS COAL MINES - APN NEWS
APN News reported that, World’s largest coal producer Coal India is in talks with Indonesia’s Sinar Mas Group for acquiring coal mines i ...
Wednesday, 15 December 10
GOVT SETS NEW MINIMUM LEVEL FOR DOMESTIC MARKET SALES - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal producers are required to sell at least 24.17 percent of their production to the domestic market nex ...
Wednesday, 15 December 10
CAPESIZE RATES ARE NOW AT THEIR LOWEST LEVEL SINCE AUGUST
It was a repeat performance for the market this week, with another increase in earnings for the small sizes but a sharp drop for the Capes. Overall ...
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- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Planning Commission, India
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
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