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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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Saturday, 14 August 10
INDONESIAN THERMAL COAL PRICES EXPECTED TO MOVE UP IN SEPTEMBER 2010 - CHAIRMAN ICMA
COALspot.com: Indonesian Coal Mining Association is expecting, the Indonesian and international coal prices will increase, and will be reached ...
Thursday, 12 August 10
ETA STAR INDIA PUTS FORWARD COAL MINING PLAN FOR TETE, MOZAMBIQUE, IN 2011
ETA Star India Projects Pvt, which is carrying out coal prospecting and surveying work in the Moatize coal region, in Tete province, will present it ...
Thursday, 12 August 10
SUPRAS WERE FIXED IN THE MID/HIGH TEENS FOR INDO-INDIA TRIPS - FEARNBULK
Handy
Activity is gradually picking up in the Atlantic with more enquiries seen for short period tonnage for the end of August. With the grain sea ...
Thursday, 12 August 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 94.86 FOR AUGUST 2010 SUPPLIES
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Wednesday, 11 August 10
BRAZILIAN GIANT VALE LOOKING TO BOOST ITS COAL OUTPUT
BRAZILIAN mining giant Vale is not content with being the world's largest iron ore miner. The miner is banking on ambitious growth plans to see it ...
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- Sojitz Corporation - Japan
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- Ministry of Finance - Indonesia
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- VISA Power Limited - India
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- Romanian Commodities Exchange
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- Power Finance Corporation Ltd., India
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- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
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- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
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- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
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- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
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- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
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- Energy Development Corp, Philippines
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- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- The Treasury - Australian Government
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- Thai Mozambique Logistica
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- MS Steel International - UAE
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- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
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- Standard Chartered Bank - UAE
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- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- The University of Queensland
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
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- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
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- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
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- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
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- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
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- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
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- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
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