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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, 06 September 10
DRY BULK MARKET GAINS 6.05% ON WEEK, BOOSTED BY CAPESIZE VESSELS
The dry bulk market is looking to capitalize last week’s gains of more than 6 percent in this week, as the capesize segment seems to be on a h ...
Sunday, 05 September 10
HARUM ENERGY EYES 7.4 MILION TONS OF COAL OUTPUT IN 2010
Indonesia's coal miner PT Harum Energy Tbk, controlled by Indonesian tycoon Kiki Barki, is eyeing 7.4 million tons of coal production in 2010, a 27 ...
Sunday, 05 September 10
THE FREIGHT MARKET WAS BIT VOLATILE WITH NO CLEAR INDICATION OF THE MARKET - CAPT REDDY
COALsopot.com: The freight market was bit volatile with no clear indication of the market.
However the BDI continued the upward trend mainly due ...
Sunday, 05 September 10
NOROCHCHOLAI POWER PLANT TO BE COMMISSIONED ON JANUARY 1
Daily news reported that, the Norochcholai coal power plant will be commissioned on January 1, 2011 adding 300 megawatts to the national power grid ...
Friday, 03 September 10
BANPU CUTS INDONESIAN HOLDING BUT ITM REMAINS KEY STRATEGIC UNIT - BANGKOK POST
"SET-listed Banpu Plc, Asean's largest coal miner, yesterday announced the sale of an 8.72% stake in its listed coalmining holding company in ...
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- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- PTC India Limited - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
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