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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, 02 July 10
PROPOSED MINERAL RESOURCE RENT TAX - PRESS RELEASE (2)
Press Release: BHP Billiton, Rio Tinto and Xstrata said today that they are encouraged by the Federal Government’s announcement that it propos ...
Friday, 02 July 10
MINERALS RESOURCE TAXATION IN AUSTRALIA - PRESS RELEASE
Press Release : Rio Tinto acknowledges the Australian Government’s announcement that the Resource Super Profits Tax (RSPT) proposal will be re ...
Thursday, 01 July 10
TATA POWER TO RAISE US$300 MILLION THROUGH ITS COAL SPVS TO FUND ADDITIONAL ACQUISITIONS AND / OR REDUCE OUTSTANDING DEBT
Stock Markets Review reported that, Tata Power, India’s largest private power player has signed an agreement to raise US$300 million in Bhira ...
Thursday, 01 July 10
HELLENIC SHIPPING NEWS POLL: THE BDI WILL STAY ABOVE 3,000 POINTS IN THE SECOND HALF OF 2010
When Hellenic Shipping News Worldwide prepared June’s poll asking readers about where do they think that the Baltic Dry Index (BDI) will range ...
Thursday, 01 July 10
PANAMAX MARKETS CONTINUE TO DROP IN ALL BASINS - FEARNLEYS
Handy
Atlantic rates continue to slide with little activity. Supras open in USG get low 30´s to Med and mid 40´s to FEast. Hmax/Supra ...
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- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Australian Coal Association
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- VISA Power Limited - India
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