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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, 26 October 10
INDONESIA SHIPPED 5.32 PERCENT LESS COAL IN SEPTEMBER 10
COALspot.com: Indonesia, the world largest coal exporter, shipped 21,661,817 MT of coal in September 2010, which is 5.32 percent lesser than Au ...
Tuesday, 26 October 10
DRY BULK MARKET TO KEEP RISING THIS WEEK ON STRONG CHINESE IRON ORE AND THERMAL COAL DEMAND - HELLENIC SHIPPING
Overcapacitated or not, the dry bulk market keeps its positive momentum as we move forward this week, with the Baltic Dry Index (BDI) rising by 0.77 ...
Monday, 25 October 10
TWO CHINESE COMPANIES INK DEAL TO TAP AUSSIE COAL RESERVES
China Daily reportd that, two Chinese coal firms have teamed up to explore and develop coal resources in an area in Australia that has forecast rese ...
Monday, 25 October 10
DRY BULK MARKET STILL HEAVILY DEPENDENT ON CHINA, POSTS SMALL WEEKLY LOSS OF 1.27% - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With every twitch and turn from China’s metals industry, the dry bulk market is disproportionally affected, as evidenced by the course of the ...
Sunday, 24 October 10
SUPRAMAX VESSELS BEING FIXED AROUND $ 15 K PER DAY DELIVERY N. CHINA FOR TRIP VIA INDONESIA TO INDIA - VISTAAR SHIPPING
COALspot.com: The freight market this week remained almost at same levels with not much change. However the Far East/SE Asia market was quite soft w ...
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- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Australian Coal Association
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
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