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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, 25 November 10
INDONESIAN ROUNDS ARE ACHIEVING IN THE LOW 10S, OWNERS ARE NOT KEEN FOR TRIPS TO INDIA - FEARNBULK
HANDY
Uneventful week - Supra/Panamax stems ex USG to China/Korea/Japan are the main focus + grains ex. Argentina. The Atlantic market activity re ...
Thursday, 25 November 10
JSW ENERGY BUYS CANADIAN COAL FIRM FOR $411 MN - NDTV PROFIT
NDTV Profit reported that, Sajjan Jindal-owned JSW Energy on Wednesday said it has entered into an agreement to buy out British Virgin Islands-based ...
Thursday, 25 November 10
DRY BULK MARKET STILL GOING STRONG THIS WEEK, CAPESIZE SECTOR LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum yesterday, with the industry’s benchmark, the Baltic Dry Index (BDI) gaining a further 0.64% to e ...
Wednesday, 24 November 10
COAL PRODUCTION PREDICTED TO CLIMB IN SUNNIER 2011 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal producers are expected to increase output by 13 percent in 2011, thanks to predicted better ...
Monday, 22 November 10
RUSSIA'S KTK HAS PRODUCED 4.59 MLN TONNES OF COAL IN FIRST 9 MONTHS OR AN INCREASE OF 5% YEAR-ON-YEAR
COALspot.com (Press Release) - KTK has produced 4.59 mln tonnes of coal in first nine months or an increase of 5% year-on-year.
Kuzbasskaya Topli ...
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- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- PTC India Limited - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
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