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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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Sunday, 28 November 10
FREIGHT MARKET SEEMS TO BE NERVOUS - VISTAAR
COALspot.com - The freight market continued to remain uncertain even though only cape index was down by 8.31 pct.
Overall the market seems to be ...
Friday, 26 November 10
INDIA WILL IMPORT 100 MLN TONS OF COAL BY 2012 - LAKSHMINARAYANA
COALspot.com – “India’s coal shortfall will reach 100 million mt by 2011-12”, said Lakshminarayana, Vice Preside ...
Friday, 26 November 10
CHINAS COAL INVENTORY STAYS HIGH FOR 22 MONTHS AT 220 MLN T, ASSOCIATION
Xinhua News Agency reported that, China’s coal inventory has stayed high and unchanged for 22 months to be around 220 million tonnes, reflecti ...
Friday, 26 November 10
DR WOLFGANG CIESLIK TO HEAD GERMAN COAL IMPORTERS ASSOCIATION
COALspot.com – (Press Release): The Management Board of the German Coal Importers Association (Verein der Kohlenimporteure e.V.) has elected D ...
Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal pric ...
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- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- The University of Queensland
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
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