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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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Tuesday, 09 November 10
NOBLE GROUP APPOINTED AS THE EXCLUSIVE MARKETING AGENT FOR PT. BERAU COAL
COALspot.com: Noble Group Limited has recently been appointed as the exclusive marketing agent for PT. Berau Coal production exported to internation ...
Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
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- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- The University of Queensland
- Carbofer General Trading SA - India
- PTC India Limited - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Economic Council, Georgia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Central Java Power - Indonesia
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