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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, 21 November 10
THE FREIGHT MARKET MAY SLIGHTLY FIRM UP NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market continued its down fall with BDI down by 6.83 pct and closed at 2,155 points.
According to Vistaar Shipping of S ...
Saturday, 20 November 10
ITALIAN STEAM COAL MARKET HAS RECOVERED - ITALIAN COAL ASSOCIATION
Press Release - This year Italy will import 17 million tons of steam coal, up 3% from 2009, and 5.5 million tons of coking coal and PCI, up 37% over ...
Friday, 19 November 10
WE'LL THINK ABOUT COAL TOMORROW - ANALYSIS
The future of coal generation in Russia is in question. The largest energy companies have abandoned their initial plans to switch their therma ...
Friday, 19 November 10
DRY BULK MARKET ON THE ROPES WITH BDI PLUNGING TO 2,164 POINTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the panamax markets suffering the most this week, but a ray of hope for the capesize market, which appears to be stabilizing after days of fall ...
Thursday, 18 November 10
WORLD COAL ASSOCIATION WELCOMES NEW CHAIRMAN & SHENHUA GROUP AS NEW MEMBER 17 NOVEMBER 2010
Press Release – The premier global coal industry association marks its 25th anniversary with a new Chairman and welcomes China’s lar ...
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- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
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