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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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Thursday, 08 July 10
KPCL RECEIVES 8 QUALIFIED BIDS TO SUPPLY 500,000 MT OF COAL
COALspot.com: Indian state utility KARNATAKA POWER CORPORATION LIMITED has opened price bid yesterday.
According to a participant, the quo ...
Thursday, 08 July 10
DRY BULK MARKET STILL PLUNGING, NOW STANDING AT 14 MONTH LOWS
The dry bulk shipping market’s demise isn’t over yet, as the industry’s main benchmark, the Baltic Dry Index (BDI) has been on a f ...
Wednesday, 07 July 10
MACQUARIE SEES CHINA COMMODITIES PRICE FALLS AND CUTBACKS AHEAD - MINEWEB
MineWeb reported that, The research arm of Australia's Macquarie Bank - one of the most reliable of China watchers - in its latest briefing on Chin ...
Wednesday, 07 July 10
COAL PRICES ON THE RISE
Caixin online reported that, China's domestic coal prices have seen a 26.2 percent year-on-year rise in May. Meanwhile, the volume of coal im ...
Tuesday, 06 July 10
INCREASE IN DRY BULK SPOT FIXTURES UNABLE TO BOOST RATES, LOSING STREAK CONTINUES
Yet another week began on a negative note for the dry bulk shipping market, with the Baltic Dry Index posting its 28th straight losing daily session ...
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- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- The University of Queensland
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
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