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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, 13 December 10
ICE FUTURES EUROPE TO LAUNCH IHS MCCLOSKEY INDONESIAN SUB-BITUMINOUS FOB MARKER COAL CONTRACTS - MONDOVISIONE
Mondovisione reported that, IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over ...
Monday, 13 December 10
NALCO TO START WORK ON RS 18K CR ($ 4,010,695,091) INDONESIAN PROJECT BY JUNE - MSN
MSN reported that, State-owned NALCO today said it has selected UAE-based RAK Minerals as JV partner for its Rs 18,000 crore (US$ 4,010,695,091 ...
Monday, 13 December 10
DEUTSCHE BANK RAISES COAL FORECASTS ON MARKET SHORTAGE - BLOOMBERG
Deutsche Bank AG raised price forecasts for thermal coal by as much as 17 percent on expectations that a shortage of the fuel will widen over the ne ...
Monday, 13 December 10
K SERA SERA TO SPEND RS325CR TO BUY COAL,OIL & GAS FIRMS STAKE - LIVE MINT
The company might have to dole out around Rs 225 crore (US$ 50,122,522) for picking up the majority stake in the coal mine in Indonesia and around R ...
Thursday, 09 December 10
OVERSUPPLY OF SHIPS BOUND TO KEEP DRY BULK FREIGHT RATES SUBDUED DURING 2011 SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
An oversupply of vessels is expected to keep freight rates from flying as high as in recent years said a relative shipping report from BIMCO’s ...
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- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- The University of Queensland
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
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