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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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Wednesday, 21 July 10
CHARTER RATES FOR BIG SHIPS GO INTO FREEFALL
It is reported that concerns over the slowdown in the mainland construction sector posturing over ore price negotiations and a general summer slowdo ...
Wednesday, 21 July 10
FEWER SHIPS SOLD FOR SCRAP IN JUNE, ADDING PRESSURE TO FREIGHT RATES
The easing of vessel tonnage supply should be among the main concerns among ship owners, especially those active in dry bulk shipping. The reason is ...
Wednesday, 21 July 10
BUKIT ASAM SEALS RP900 BIO COAL DEAL
Souce: Insider Stories
Insider Stories reported that, State-Owned coal producer PT Tambang Batubara Bukit Asam Tbk (PTBA) have agreed t ...
Wednesday, 21 July 10
TUAH TURANGGA BUYS ABP US$ 15.9 MIO
Source: Insider Stories
Insider Stories reported that, Komatsu heavy equipment PT United Tractors Tbk (UNTR) through its wh ...
Tuesday, 20 July 10
CHINA'S RELIANCE ON COAL TO DROP 7% BY 2015 - XINHUA NET
Xinhua Net reported that, China's coal consumption is likely to drop to 63 percent of total energy consumption by 2015, down from 70 percent last y ...
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- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- MS Steel International - UAE
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- The University of Queensland
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
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