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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, 18 November 10
MUNDRA PORT AWARDED BEST PRIVATE PORT - COMMODITY ONLINE / HELLENIC SHIPPING
Adani Group owned, Mundra Port has been awarded the Annual Indian Maritime Gateway Award for the Best Private Port of the Year for the third consecu ...
Wednesday, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
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- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- White Energy Company Limited
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
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