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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, 07 August 10
INDIAN COAL IMPORTS WILL PLAY AN IMPORTANT PART IN KEEPING THE FREIGHT MARKET FIRM IN FUTURE - VISTAAR
COALspot.com: The freight market was volatile with market ending firmed and the BDI crossing 2000 points up by 3 pct, however the BCI was up by 14 p ...
Friday, 06 August 10
KRISHNAPATNAM PORT WINS NON MAJOR PORT AWARD 2ND TIME IN A ROW
COAlspot.com ( Press Release) Krishnapatnam Port, the world-class port on the Indian horizon, took the top honors for the second time in a row, in t ...
Friday, 06 August 10
POLANDS KOPEX GROUP DEVELOPS COAL MINE IN INDONESIA
Polishmarket reported that, Polish mining concern Kopex Group, , is to build the first in Indonesia mechanised underground coal mine. The group is c ...
Thursday, 05 August 10
MORATORIUM MAY HURT NEW PROJECTS: MINING GROUP
The government’s proposed two-year moratorium on issuing new concessions to convert forests and peatlands to other uses may hinder new mining ...
Thursday, 05 August 10
IRON ORE EXPORT BAN COMPOUNDS PROBLEMS OF INDUSTRY - BUSINESS STANDARD
Forex loss of Rs 300 crore (US$ 65.63 million) ; truckers, ports, Railways bear the brunt
The Karnataka government’s move to ban the export ...
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- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
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