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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, 30 June 10
PTBA TO SUPPLY ADDITIONAL 180 MLN TONS OF COAL TO PLN FOR 20 YEARS
COALspot.com: Indonesia's state-owned coal mining company PT Tambang Batubara Bukit Asam Tbk (PTBA) has entered into a new contract with state owne ...
Wednesday, 30 June 10
U.S. STEAM COAL EXPORTS TO SUPPORT FREIGHT RATES
Booming North American coal exports to China, driven by the country's insatiable need for steel raw materials, will provide support to freight rate ...
Tuesday, 29 June 10
EXPORT LETTER OF CREDIT PLAN DUMPED - THE JAKARTA GLOBE
The Jakartaglobe reported that, Indonesia has canceled a proposed regulation that would have required exporters of commodities such as cocoa, coffee ...
Tuesday, 29 June 10
BUMA TO MOVE AROUND 333 MLN BCM OF OVERBURDEN IN 2010
COALspot.com: PT Delta Dunia Makmur Tbk, holding company of Indonesia's second largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA), ...
Tuesday, 29 June 10
DRY BULK'S DOWNFALL FINALLY SHOWING SIGNS OF STABILIZATION
Although the dry bulk market has begun the week where it left off, that is on a downward note, brokers and charterers appear to be on the consensus ...
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- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Australian Coal Association
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- White Energy Company Limited
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