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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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Friday, 29 October 10
CAPE MARKET STARTED TO BREAK THOUGH THE UPWARDS RESISTANCE LEVEL OF USD 40K DAILY FOR SPOT CARGOS - FEARNLEYS
HANDY
The Atlantic markets remain flat and lackluster. The expectations that the grain ...
Friday, 29 October 10
CHINA'S COAL DEMAND DRIVES DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is posting marginal, yet steady growth this week, with the Baltic Dry Index rising yesterday to 2784 points, up by 0.2%. Both th ...
Wednesday, 27 October 10
TNPL TO AWARD 240,000 MT COAL SUPPLY CONTRACT TO COAL & OIL
COALspot.com: Tamil Nadu Newsprint Papers Limited, Tamil Nadu state owned Newsprint and Printing & Writing Paper producer has opened a coal purc ...
Wednesday, 27 October 10
CHINA AIDS RUSSIA IN DEVELOPING COAL RESOURCES - PEOPLE'S DAILY
People's Daily reported that, Russia will use 6 billion U.S. dollars in loans provided by China to develop coal resources in Sakhalin Island, Elege ...
Wednesday, 27 October 10
MAIDEN COAL SHIPMENTS TO NOBLE RESOURCES - PAN ASIA AUSTRALIA
Press Release :
First Coal Shipments made from Nadvara Coal Project, East Kalimantan
51,616 tonnes delivered from October production &ndas ...
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- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Planning Commission, India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
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