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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, 13 July 10
FURTHER LOSSES FOR BALTIC DRY INDEX ON HIGH VESSEL SUPPLY
The dry bulk market can’t catch a breath, as it has now entered the 7th straight week of losses. The industry’s benchmark, the Baltic Dr ...
Sunday, 11 July 10
OVERALL NO OR NEGLIGIBLE IMPACT IN ARUTMIN MINE - BUMI
COALspot.com: Bumi denies the media reports on an impact of unusually rains on coal production in BUMI mines.
"Arutmin is being impacted by ...
Saturday, 10 July 10
FREIGHT MARKET SITUATION MAY CONTINUE FOR NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com: The market continued to soften further with the cape and panamax index down by about 20 pct and closed at 2,102 and 1,944 points respe ...
Saturday, 10 July 10
STC OF INDIA TO ASSOCIATE WITH FUEL SUPPLIERS
COALspot.com: State Trading corporation of India, which is under Ministry of Commerce, has invited Expression of Interest from coal suppliers ...
Saturday, 10 July 10
SCOMI TO SELL STAKE IN INDONESIA OPS - THE STAR
The star online reported that, Scomi Marine Bhd will sell a stake in its marine logistics business in Indonesia to a large Indonesian company to dea ...
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- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Planning Commission, India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
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