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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, 15 October 10
VALUE ADDED TAX FOR COAL TO RE-INTRODUCE IN INDONESIA
COALspot.com: Indonesian government is drafting a ministerial decree to re-introduce value added tax for coal and mineral. Coalindo weekly news lett ...
Thursday, 14 October 10
COAL PRICES AT QINHUANGDAO PORT UP - CAPITALVUE
Capitalvue reported that, prices of steam coal yielding 5,500 kilocalories per kilogram (kcal/kg) in Qinhuangdao Port have risen five yuan to 715-72 ...
Thursday, 14 October 10
DRY BULK MARKET MAINTAINS POSITIVE TREND ON FIRMER CHINESE IRON ORE DEMAND
The dry bulk market has kept its upward trend set since last week, with the industry’s main benchmark, the Baltic Dry Index (BDI) rising to 2, ...
Tuesday, 12 October 10
DRY BULK MARKET LOOKING FOR DIRECTION AFTER WEEK OF CAPESIZE GROWTH
The dry bulk market ended Monday unchanged from Friday’s closing, today standing at 2,695 points. In summary, the capesize and the supramax se ...
Tuesday, 12 October 10
COAL SPOT TRADING MAY SOOTH PRICING CONFLICTS - GLOBAL TIMES
Global Times reported that, Tianjin-based Bohai Commodity Exchange launched steam coal for spot trading for the first time Monday. Steam coal is mai ...
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- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
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- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
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- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
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- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Directorate Of Revenue Intelligence - India
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- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
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- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
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- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- The University of Queensland
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- Mintek Dendrill Indonesia
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- Indonesian Coal Mining Association
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- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
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- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
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- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
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- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
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