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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, 02 October 10
FOUR INDONESIAN COAL FIRMS KEEN TO TIE UP WITH NALCO - SIFY
Sify reported that, Four Indonesian coal companies have shown interest to tie up with public sector National Aluminium Company (Nalco) for its 4 bil ...
Friday, 01 October 10
COAL TRADERS POWER FOREIGN ASSET BUYS - ECONOMIC TIMES
Economic Times reported that, the rush to own coal assets is leading to innovative alliances. are teaming up with utilities like , Reliance Power an ...
Thursday, 30 September 10
LOW CALORIFIC VALUE COAL MAY BE SOLD BELOW COAL REFERENCE PRICE IN INDONESIA
COALspot.com: Indonesia, the world’s largest coal exporter has issued another ministerial decree to regulate the selling price of coal of Indo ...
Thursday, 30 September 10
INITIAL PHASE OF MOATIZE MINING BY EARLY NOVEMBER - ALL AFRICA
All Africa report that, the initial phase of mining coal at Moatize, in the western Mozambican province of Tete, will begin by early November, and t ...
Thursday, 30 September 10
THE PANAMAX CONTINUED ITS DOWNWARD TREND FROM LAST WEEK - FEARNBULK
HANDY
Activity remains slow this week combined with a lack of fresh enquiry and tonnage over-supply in the Atlantic. Indexes are all negative exce ...
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- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- PTC India Limited - India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- CNBM International Corporation - China
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