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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, 01 September 10
JAKARTA TO HOST MAJOR INTERNATIONAL MINING EVENT
COALspot.com: (Press Release) In October 2010, the Indonesian Mining Association (IMA) and the Indonesian Coal Mining Association (APBI) will host t ...
Tuesday, 31 August 10
CIL MAY SET UP POWER PLANT TO UTILIZE EXCESS COAL
The Economic Times reported that, the world's largest coal producer Coal India Ltd (CIL) said it may consider setting up power plants in the countr ...
Tuesday, 31 August 10
NALCO SEEKS STAKES IN INDONESIAN COAL MINES
Economic Times reported that, National Aluminium Co. Ltd said on Tuesday it wants to buy stakes in Indonesian coal mines to secure supplies fo ...
Tuesday, 31 August 10
CAPESIZE RATES ON VOLATILE MOVEMENT
With Monday a holiday for London’s stockmarket (Bank Holiday), the dry bulk market took a breather before presenting ship owners and charterer ...
Monday, 30 August 10
MUNDRA PORT BEGINS OPERATIONS AT NEW TERMINAL IN GUJARAT
Economic Times reported that, Adani group firm Mundra Port has commenced operations at its 20-million tonnes port at Dahej in Gujarat, the company s ...
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- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Parliament of New Zealand
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- White Energy Company Limited
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
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