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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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Thursday, 09 December 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 103.41 PMT FOR DECEMBER DELIVERY
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Thursday, 09 December 10
DRY BULK MARKET LOOKING FOR DIRECTION THIS WEEK, AS CAPESIZE SHIPS END THEIR MISFORTUNES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk has began the week on a positive note capitalizing on the positive sentiment which finally prevailed during the last days of the previo ...
Monday, 06 December 10
NTPC MAY OPT FOR INDONESIA OVER AFRICA, OZ FOR COAL MINES
Country's largest power producer NTPC, which is scouting for coal properties abroad to fuel its power plants back home, may zero in on Indonesia fo ...
Saturday, 04 December 10
INDONESIA TO INDIA AND CHINA SEA FREIGHT UP BY ABOUT US$ 2.50 PMT - CAPT. REDDY
COALspot.com - The freight market even though remained weak, but towards end of the week the market seemed to firm up.
The BDI was almost at sam ...
Saturday, 04 December 10
OFF WEST COAST OF INDIA TONNAGE IS SEEMINGLY QUITE SPARSE - FEARNBULK
Handy
The Atlantic markets are weak and remained unusually calm after the Thanksgiving ...
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- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Planning Commission, India
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
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