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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, 18 August 10
MADHUCON TO START MINING AT SUMATRA BLOCK IN 2-3 MONTHS
DNA India reported that, Hyderabad-based Madhucon Projects is set to begin mining at one of its coal blocks in Indonesia in 2-3 months, said S Vaiku ...
Tuesday, 17 August 10
HANDIES AND SUPRAS WOKE UP AGAIN AFTER SEVERAL WEEKS OF LETHARGY - BRS
A spectacular increase in Cape size rates pushed the BDI up more than 20% this week, with demand for prompt tonnage in the Pacific causing a major s ...
Monday, 16 August 10
INDIA'S TNPL TO SUPPORT TNEB WITH COAL SUPPLIES
COALspot.com: TNPL to award 300,000 MT of coal supply contract to Nehel General Trading of India. Tamil Nadu state undertaking , Tamil N ...
Monday, 16 August 10
INDONESIA'S PLN SECURED COAL SUPPLIES, LESS IMPACT BY RAINS
COALspot.com: Indonesian State Electricity Company, PT Perusahaan Listrik Negara (PLN), has secured coal supplies for all of its power plants except ...
Sunday, 15 August 10
THE FREIGHT MARKET IS EXPECTED TO REMAIN FIRM - CAPT REDDY
COALspot.com: The BDI rose by almost 22 pct despite peak holiday season which is usually quite market , where as the BCI up sharply by 46 pct which ...
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- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
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