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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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Thursday, 09 September 10
INDONESIA SWAPS COAL FOR INFRASTRUCTURE - FT
As Asia’s major economies bound forward and their hunger for energy surges over the next decade, Indonesia is strategically positioned to take ...
Thursday, 09 September 10
DRY BULK MARKET IS LOOKING TO INCREASE GAINS ON OCTOBER IRON ORE CONTRACTS
The “success” story that the dry bulk market has been displaying during the past couple of weeks is being materialized as we head toward ...
Tuesday, 07 September 10
INDIA IMPORTS 1.63 MLN T OF COAL FOR THE PERIOD 30 AUGUST - 5 SEPTEMBER - SOURCES
COALspot.com: India has imported 1.07 million tons of power plant coal, 0.520 mln tons of coking coal and around 41,000 mt of Anthracite coal for th ...
Tuesday, 07 September 10
GOVERNMENT DECLARED INDONESIAN COAL PRICE REFERENCE DECLINE FOR THIRD-STRAIGHT MONTH
COALspot.com: Indonesian thermal coal price reference, a monthly benchmark price declared by Ministry of Energy and mineral resources of Repub ...
Tuesday, 07 September 10
MERCATOR TO BUY COAL MINE IN INDONESIA THIS FISCAL
Mercator Lines, India’s second-largest shipping company which has diversified into coal mining, will buy a coal mine in Indonesia with more th ...
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- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Georgia Ports Authority, United States
- Economic Council, Georgia
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
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