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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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Monday, 02 August 10
DRY BULK MARKET NEEDS TO FIND ADDITIONAL SUPPORT IN AUGUST
The dry bulk market ended another week of rebounding, posting on Friday its 11th straight rise. Still, as analysts point out the rate of this rise h ...
Monday, 02 August 10
LINC, ADANI COMPLETE THEIR COAL CONNECTION
"THE much-speculated deal between underground coal gasification company Linc Energy and India's Adani Enterprises is set to be signed tomorrow ...
Saturday, 31 July 10
TABONEO ANCHORAGE TO LOAD 1.5 MLN TON OR MORE COAL IN H1 AUGUST
COALspot.com: Eighty five ocean going vessels and barges have been nominated by coal buyers to their respective suppliers in Indonesia to load about ...
Saturday, 31 July 10
SEEMS THE FREIGHT MARKET WOULD BE FAIRLY STABLE FOR H2 2010 - VISTAAR
COALspot.com: The BDI continued moving up since 16th July and rise by 14 pct almost touching 2000 points.
The BDI was up by 7.72 pct last week wh ...
Friday, 30 July 10
DRY BULK MARKET BACK ON THE ROAD TO RECOVERY
Freight rates for dry bulk carriers have continued to edge higher this week, with the industry’s main benchmark, the Baltic Dry Index (BDI) ga ...
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- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Planning Commission, India
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Parliament of New Zealand
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
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