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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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Saturday, 23 October 10
HEAVY RAINS NO DAMPENER FOR 2010 COAL OUTPUT TARGET, MINISTRY SAYS - THE JAKARTA GLOBE
The Jakarta Globe reported that, National coal production would likely meet the target set by the Energy Ministry despite unusually heavy rain this ...
Thursday, 21 October 10
WORLDS FIRST, SINGAPORE EXCHANGE TO CLEAR OTC INDONESIAN COAL SWAP - MONDOVISIONE
Mondovisione reported that, Singapore Exchange (SGX) will be the first exchange in the world to clear over-the-counter (OTC) Indonesian Sub-Bitumino ...
Thursday, 21 October 10
MEC WOOS INDIAN POWER FIRMS FOR 50% STAKE SALE - BUSINESS STANDARD
Business-Standard reported that, Singapore-based MEC Coal plans to rope in an Indian power company as a 50 per cent equity partner. It is believed t ...
Thursday, 21 October 10
CAPESIZE, A FANTASTIC WEEK WITH IMPROVED RATES IN BOTH BASINS - FEARNBULK
Handy Activity remains slow this week combined with a lack of fresh enquiry in the Atlantic. Indexes are all negative except Cape but it is worth no ...
Wednesday, 20 October 10
BLENDING OF IMPORTED COAL AT THERMAL PLANT UP TO 30 % MAY BE ALLOWED - PUNJAB NEWS LINE
Punjab News Line reported that, Indian government is considering allowing increase in the blending ratio of imported coal from 10 to 30 percent at t ...
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- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- The University of Queensland
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
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