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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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Wednesday, 22 September 10
DRY BULK MARKET SENTIMENT TURNS SOUTH AS IRON ORE DEMAND DECLINES
The dry bulk market has once again turned the tide, with the industry’s benchmark, the Baltic Dry Index (BDI) turning south during the previou ...
Monday, 20 September 10
MMTC SEEKS TO BUY 1.3 MT OF COAL FOR INDIA UTILITIES - SXCOAL
MMTC Ltd., India’s largest state- owned trading company, is seeking bids for the supply of 1.3 million tonnes of coal to feed power plants run ...
Monday, 20 September 10
KANGAROO RESOURCES SIGNS PARTNERSHIP WITH ASEAMCO FOR INDONESIAN COAL ASSETS - PROACTIVE INVESTORS
International coal producer Kangaroo Resources (ASX: KRL) has completed a new three-year agreement with Australian mining consultants ASEAMCO to del ...
Monday, 20 September 10
ICVL LOOKS FOR COAL ASSETS IN UZBEK, INDONESIA, AUSTRALIA - ECONOMIC TIMES
Economic Times reported that, International Coal Ventures, or ICVL, the special purpose vehicle floated by five state-owned firms to scout for coal ...
Monday, 20 September 10
IRON-ORE SHIPPING DEMAND MAY GAIN ONCE CHINA STEEL CUTS FINISH, SSY SAYS
Demand to transport iron ore may rebound once China ends steel-production cuts and steel prices may gain in the next several months because of the r ...
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- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Parliament of New Zealand
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
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- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
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