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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, 15 September 10
VIETNAM TO IMPORT UP TO 15 MLN TONS COAL/YR BY 2015 - VIETNAM BUSINESS
Vietnam Business reported that, Vietnam will need to import 3 million to 15 million tons of coal a year by 2015, rising to 21 million to 40 million ...
Tuesday, 14 September 10
MID HIGH TEENS FROM WCI, AND HIGH TEENS FROM ECI TO CHINA - BRS
A fairly flat market for the dry bulk segments this week, although the Panamaxes jumped on the back of strong grain exports in the Atlantic. It ...
Tuesday, 14 September 10
HIGH CHARTERING ACTIVITY NEEDS TO KEEP UP FOR DRY BULK RATES TO REMAIN HIGH
Last week’s increase of spot chartering activity pushed dry bulk freight rates to new highs, after a less than lackluster summer. As a result, ...
Monday, 13 September 10
GLENCORE BUYS STAKE IN MINER BUMI
The Jakarta globe reported that, Switzerland-based Glencore International, the world’s largest commodities trader, has quietly acquired a $200 ...
Monday, 13 September 10
IT'S JAI INDONESIA FOR OUR POWER FIRMS
Indian power producers have been compelled to look abroad for fuel to run upcoming facilities, as domestic generation is unlikely to be able to meet ...
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- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- PTC India Limited - India
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
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