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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, 23 August 10
COAL FOR FAST-TRACK PROGRAM ASSURED
Antara and the Jakarta globe reported that, the coal supply for the government’s 10,000 megawatt “fast- track” program was assured ...
Monday, 23 August 10
NOBLE RESOURCES AND PAN ASIA INK MAJOR COAL DEAL
Pan Asia Corporation Limited has, via Innovation West Pty Ltd, entered into a binding coal purchase & finance agreement with Noble Resources Pte ...
Monday, 23 August 10
THE FREIGHT MARKET IS EXPECTED TO BE FIRM FOR NEXT COUPLE OF WEEKS - VISTAAR SINGAPORE
COALspot.com: The BDI continued to rise this week by 11.67 pct with the other sectors also keeping the moment. The cape size index also was up by 11 ...
Friday, 20 August 10
JAKARTA TO HOST 9TH ASIA PACIFIC MINING CONFERENCE AND EXHIBITION IN OCTOBER
ASEAN Federation of Mining Association (AFMA), an association of mining groups in Southeast Asia, will hold the 9th Asia Pacific Mining Conference a ...
Friday, 20 August 10
OVERSEAS AND GENERAL SUBSIDIARY INKS US$52M JONGKANG COAL SALES CONTRACT - PROACTIVE INVESTORS
Proactive Investors reported that, overseas and General (ASX: OGL) has reported that its Indonesian majority owned subsidiary, PT OGL Indotrade, has ...
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- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Planning Commission, India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- MS Steel International - UAE
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- White Energy Company Limited
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- The University of Queensland
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
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