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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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Wednesday, 15 December 10
LARGE ORDERBOOK TO HINDER 2011 DRY BULK MARKET REBOUND DESPITE INCREASED DEMAND SAYS PARAGON SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A large orderbook which currently stands at 53% of the existing fleet is expected to render 2011 another challenging year for the dry bulk marke ...
Wednesday, 15 December 10
SMALLER DRY BULK VESSELS ARE LOOKING UP, LARGER ONES FAIL TO DELIVER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market lost further ground at the beginning of the week, in what could prove one of the slowest periods ship owners have been faced. Ye ...
Tuesday, 14 December 10
COAL IMPORTS MAY INCREASE 78% TO CHINA, INDIA: ENERGY MARKETS - BUSINESS WEEK
Business Week reported that, China and India may increase imports of coal by 78 percent to 337 million metric tons next year, further driving up pri ...
Tuesday, 14 December 10
BANPU PLANNING PRODUCTION BOOM - BANGKOK POST
Australian, Indonesian output to lead growth
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, wants to nearly double its coal ...
Tuesday, 14 December 10
THE FREIGHT RATES FROM INDONESIA TO INDIA AND CHINA REMAINED FIRM - CAPT. REDDY
COALspot.com - The freight market continued to be soft with the Cape sector most effected which was down by 289 points and closed at 2,694 poi ...
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- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- White Energy Company Limited
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Australian Coal Association
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
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