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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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Friday, 03 September 10
NALCO, INDONESIAN FIRM DIFFER ON COAL SUPPLY TO SMELTER - DNA INDIA
A few days ago, National Aluminium Company (Nalco) advertised in Indonesian newspapers asking for companies to bid for coal supplies for its 500,000 ...
Thursday, 02 September 10
PLN ASKED TO USE LOCAL COAL
Tempo Interactive reportd that, the Indonesian Mining Association Executive Director, Priyo Pribadi, has called on the state-run electricity company ...
Thursday, 02 September 10
NALCO OPEN TO EQUITY DILUTION IN $3.9 BN PROJECT IN INDONESIA
Business-Standard reported that, state-owned Nalco today said it is considering selling stake in its $3.9 billion (over Rs 18,000 crore) aluminium p ...
Thursday, 02 September 10
DRY BULK MARKET GAINS MOMENTUM TO INCREASE, WITH CHINA ONCE AGAIN TO THE RESCUE
With predictions from Chinese officials stating that the country’s iron ore imports during 2010 could surpass the record amounts of 2009, the ...
Wednesday, 01 September 10
STC BAGS NTPC ORDER TO SHIP 12 MT COAL
My Digital FC reported that, The State Trading Corporation (STC) has bagged NTPC’s tender to ship 12 million tonnes coal from Ind&sh ...
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- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Planning Commission, India
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
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