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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, 06 July 10
KEPCO, POSCO BUY AUSTRALIAN COAL MINES - CHOSUN
Chosun reported that, Electricity monopoly KEPCO and steelmaker POSCO have both bought coal mines in Australia.
KEPCO signed a 400 million Austra ...
Tuesday, 06 July 10
SHENHUA GROUPS 2013 PROFIT MAY EXCEED $15 BILLION - BUSINESS WEEK
Business Week reported that, Shenhua Group Corp., China’s biggest coal producer, expects profit to exceed 100 billion yuan ($15 billion) by 20 ...
Saturday, 03 July 10
THE FREIGHT MARKET CONTINUES TO BE UNCERTAIN - CAPT. REDDY
COALspot.com: The market continues to soften and the most affect sector was Panamax which was down by almost 20 pct and closed at 2447 points. The C ...
Friday, 02 July 10
SARDA ENERGY TO ACQUIRE COAL MINES IN INDONESIA
India Info Line reported that, Sarda Energy & Minerals Ltd has announced that the authorities in Indonesia have granted the Environment Cle ...
Friday, 02 July 10
DRY BULK MARKET ON A FREEFALL, REACHING ITS LOWEST IN 9 MONTHS
The Baltic Dry Index is off to break more negative records this week, as the dry bulk shipping industry’s main benchmark has failed to find ro ...
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- VISA Power Limited - India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
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