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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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Monday, 13 September 10
CIL IN TALKS WITH SHIPPING CORP TO FORM JV FOR COAL IMPORTS
Shipping Corporation of India, the largest domestic shipping liner, may form a joint venture with Coal India for coal imports, a top company officia ...
Monday, 13 September 10
FREIGHT MARKETS MAY BE A BIT SOFT THIS WEEK - VISTAAR SINGAPORE
COALspot.com: The freight market continued its upward trend with the BDI almost touching 3000 points. However the uncertainty seems to continue with ...
Friday, 10 September 10
INDONESIAN RAILWAY CONTRACT STILL UP FOR BIDDING - LOGISTICS WEEK
The tender process for a $2.2bn project to build a coal-transporting railway line in Central Kalimantan province, Indonesia, is still underway and n ...
Friday, 10 September 10
WCI INTO CHINA WITH IRON ORE ARE AIMING AROUND $ 20K - FEARNBULK
Handy
The rates are firm in every corner of the world. However it still looks Atlantic/Baltic/Black Sea offer better employment opportunities for ...
Thursday, 09 September 10
INDIANS BALCO TO BUY 50 K OF 3,000 TO 4,500 GAR CALORIFIC VALUE COAL
COALspot.com: Bharat Aluminium Company Limited (BALCO) is a subsidiary of Sterlite Industries (India) Limited and part of Vedanta Resources PLC, a L ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Planning Commission, India
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Australian Coal Association
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- White Energy Company Limited
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- PTC India Limited - India
- Parry Sugars Refinery, India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
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