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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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Tuesday, 27 July 10
INDIA HAS IMPORTED 1.5 MILLION TONS OF COAL LAST WEEK
COALspot.com: Coal imports in Indian ports have reached over 1.5 million tons for the week ended 25 July 2010. According to port agents, aroun ...
Tuesday, 27 July 10
DRY BULK SPOT CARGO DEMAND SHARPLY UP, TRIGGERING RISE IN RATES
Hot on the heels of the dry bulk market’s first weekly gain in almost two months, Monday began on a similar note, with the Baltic Dry Index (B ...
Tuesday, 27 July 10
KANGAROO RESOURCES INKS 297MT COAL RESOURCE FOR TANUR JAYA PROJECT
Kangaroo Resources has reported JORC Code compliant open cut Coal Resources totalling 297 million tonnes for the Tanur Jaya Coal Project in East Kal ...
Monday, 26 July 10
INDONESIAN COAL PRICE REFERENCE FOR JULY 2010 IS US$ 96.65 PER TON FOB VESSEL
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Monday, 26 July 10
BHATIA INTERNATIONAL, MIGHT GRAB THE MAJORITY OF COAL SUPPLY ORDER FROM MAHAGENCO
COALspot.com: Maharashtra State Power Generation Co., a provider of electricity to India’s commercial hub Mumbai, has received price bids from ...
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- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Australian Coal Association
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Planning Commission, India
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
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