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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, 11 August 10
CAPESIZE MARKET ON RECOVERY MODE
The dry bulk market, usually dormant in August, has returned on a high note this week, after last week’s gains. Monday proved to be rather buo ...
Wednesday, 11 August 10
BANPU SECURES TAKEOVER LOAN - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, has secured loans worth US$2 billion from Thai and foreign banks to proceed with ...
Tuesday, 10 August 10
KOREA'S EWP TO BUY 4 MILLION TON OF 3700 AND 4600 NAR COAL AT FIXED PRICE
COALspot.com: Korean utility East-West Power out with the tender to buy 0.670 million tons with a minimum calorific value of 4600 NAR and 0.350 mill ...
Tuesday, 10 August 10
COAL CONSTRAINS CORE SECTOR GROWTH IN JUNE 2010
Growth in the six key infrastructure sectors decelerated for the third month in June. This is primarily due to last year’s high base effect. D ...
Sunday, 08 August 10
SOUTH AFRICA INCREASES COAL EXPORTS TO INDIA BY 74% IN JULY, TRADER SAYS
South Africa’s Richards Bay, the continent’s largest coal terminal, increased sales to India by 74 percent in July from June, according ...
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- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
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- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Aditya Birla Group - India
- The University of Queensland
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
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- Singapore Mercantile Exchange
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- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
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- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Parliament of New Zealand
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- GMR Energy Limited - India
- Central Electricity Authority - India
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- Videocon Industries ltd - India
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
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- Coal and Oil Company - UAE
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- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
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- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
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