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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, 04 November 10
CAPE SIZE SENTIMENT FOR THIS WEEK WAS NEGATIVE - FEARNBULK
Handy
The Atlantic markets remain flat and lackluster. High volume of tonnage availabi ...
Thursday, 04 November 10
GVK TALKS WITH MEC FOR INDONESIAN MINES DEAL - DNA INDIA
As reported by DNA India, GVK Power and Infrastructure on Wednesday said it is in talks with Gulf-based MEC Coal to buy its coal mines in Indonesia, ...
Wednesday, 03 November 10
PANAMAX SIZE DRY-BULK CARRIER MARKET IS STRONG - GERSON LEHRMAN
Panamax class vessels have been part of the fluctuation of the broader current dry bulk market. They have experienced occasional steep movements, du ...
Tuesday, 02 November 10
ADDED VALUE REMAINS STAGNANT - MAJALAH TAMBANG
The improvement of added value of mining products in accordance with mandate of the mining law has not been visible. Minerals and coal are still exp ...
Saturday, 30 October 10
THE SUPRAMAX FREIGHT MARKET THIS WEEK REMAINED ALMOST AT LAST WEEK LEVELS - VISTAAR SINGAPORE
COALspot.com: The freight market this week remained almost at same levels except for Panamax index which was up by 191 points.
The feast/SE Asia ...
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- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Edison Trading Spa - Italy
- PTC India Limited - India
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
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