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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, 05 October 10
EWP SEEKING VIETNAMS ANTHRACITE COAL
COALspot.com: South Korea’s EWP is seeking Min 200,000MT of Vietnam coal with plus or minus 30,000MT at EWP’s (Korea East West Power Co ...
Monday, 04 October 10
2 BLN TONS OF COAL RESERVES DISCOVERED IN SOUTHERN PAKISTAN - XINHUA / HELLENIC SHIPPING
Xinhua and Hellenic Shipping reporte dhtat, the discovery of at least two billion tons of usable coal reserves has been confirmed in one of the ...
Sunday, 03 October 10
THE BDI WAS JUST INCREASED BY 8 POINTS AND CLOSED AT 2452 POINTS LAST FRIDAY - VISTAAR
COALspot.com: The BDI was almost at same levels and just increased by 8 points and closed at 2452 points , however the cape index was up by al ...
Sunday, 03 October 10
NALCO TO FINALIZE INDONESIA COAL DEAL BY JANUARY - HINDUSTAN TIMES
HindustanTimes reported that, state-owned National Aluminium Company (NALCO) will finalise a deal with a coal source in Indonesia for its $4 billion ...
Sunday, 03 October 10
INDONESIA WILL BECOME A NET IMPORTER OF ENERGY IN 2030 - BPPT
Jakarta Updates reported that,Indonesian Agency for the Assessment and Application of Technology (BPPT) predicted that the energy situation in Indon ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Australian Coal Association
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
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