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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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Friday, 23 July 10
KOWEPO TO IMPORT ADDITIONAL 1.2 MILLION TONS OF INDONESIAN COAL WITHIN 5 MONTHS
Korea Western Power Company Limited has finalized around 1.2 million tonnes of Indonesian origin of coal last week. According to K ...
Friday, 23 July 10
THE PANAMAX MARKET HAS CONTINUED ITS SLOW CLIMB - FEARNLEYS
Handy
Continued flat Atlantic markets and over-supply of tonnage across all segments on spot basis. Nevertheless there is more fresh enquiry on Co ...
Friday, 23 July 10
KPMG INDIA FACES COAL DEFICIT OF 50% OF EXPECTED POWER PLANT DEMAND, SAYS - BLOOMBERG
Bloomberg reported that, India may face a coal shortfall of 189 million metric tons a year by 2015, about 50 percent of the power sector’s exp ...
Thursday, 22 July 10
BERAUS IPO NEXT MONTH CAN BECOME THE LARGEST THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s fifth largest coal miner PT Berau Coal Energy Tbk will launch its initial public offering (IPO) ne ...
Thursday, 22 July 10
DRY BULK MARKET EDGES HIGHER, BUT RECOVERY IS SLOW
The dry bulk market’s recovery, which started last Friday has sustained its momentum thus far, but the pace of it seems to be an agonizing one ...
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- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Planning Commission, India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- VISA Power Limited - India
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
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