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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, 25 August 10
BUKIT ASAM OUT TO BECOME BIGGEST COAL PRODUCER
The Jakarta Post reported that, State-owned PT Batubara Bukit Asam Tbk intends to become the country's biggest coal producer in 2016 with productio ...
Wednesday, 25 August 10
GOVT SHOULD ALLOW DUTY-FREE IMPORT OF THERMAL COAL: ASSOCHAM
Industry body Assocham Wednesday said the government should allow duty free import of thermal coal to bring down power tariffs in the country.
&q ...
Wednesday, 25 August 10
INDIAS ADANI GROUP TO BUILD COAL RAILWAY IN INDONESIA
COALspot.com: India’s Adani Group, Indonesia’s state coal producer PT Tambang Batubara Bukit Asam (PTBA), and the South Sumatra provinci ...
Wednesday, 25 August 10
CME GROUP WILL LAUNCH NEW COAL CONTRACTS
Press Release: CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of trading and clearing ser ...
Tuesday, 24 August 10
INDIA IMPORTS 1.3 MILLION TONS COAL LAST WEEK
COALspot.com: India has imported 1.3 million tons of non - Coking coal and 468,229 Mt of coking coal for the period 16 - 22 August 2010 ...
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- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Australian Coal Association
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
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