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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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Thursday, 05 August 10
DRY BULK LOOKING TO CHINA FOR A NEW RALLY, BUT INDIA COULD BE THIS YEAR'S SURPRISE
The dry bulk market’s rebound has hit a “wall” this week, with the industry’s benchmark, the BDI (Baltic Dry Index) ending i ...
Wednesday, 04 August 10
MALAYSIA'S AGATE GROUP TIES UP WITH INDIA'S ECOGREEN TO DEVELOP COAL BUSINESS
COALspot.com: "Malaysian based AGATE Group had entered into an agreement with India's EcoGreen to jointly develop coal business in India ...
Wednesday, 04 August 10
ADARO PRODUCED 21.62 MILLION TONS OF COAL IN 1H 2010
COALspot.com: “Adaro Energy’s production volume during the second quarter of 2010 was 10.26 million tones and for the first half of 2010 ...
Wednesday, 04 August 10
CIL TO TAKE UP NEW PROJECT TO MEET INCREASED DEMAND OF COAL
As part of Annual Plan 2010-11, Planning Commission has projected all India demand of coal 656.31 Million Tonnes against which the indigenous supply ...
Tuesday, 03 August 10
INDONESIA CONSIDERING RUPIAH DENOMINATION
The jakarta post reportd that, the central bank is deliberating a potential Rupiah denomination in light of decreasing exchange rate valuations agai ...
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- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Australian Coal Association
- Economic Council, Georgia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
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