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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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Monday, 28 June 10
REVISIONS SHOULD AIM MINERAL AND COAL LAW
VIVAnews reported that, the Consortium of Mineral, Coal and Geothermal-Producing Regional Governments (Minerbapabum) is asking the government to per ...
Monday, 28 June 10
MEC TO INK COAL-EQUITY SWAP DEALS WITH POWER PROJECTS
Business Line reported that, First it was power producers moving to pick up stakes in coal mining projects to ensure the raw material supplies.
N ...
Monday, 28 June 10
COLOMBIA WILL LIKELY EXPORT 80 MILLION TONNES OF COAL IN 2010
Best Colombia reported that, Mr Hernan Martinez energy and mines minister of Colombia told reporters that Colombia will likely export 80 million ton ...
Monday, 28 June 10
WESFARMERS' SEPT QTR COAL PRICE UP 11% - SMH
SMH reported that, Wesfarmers Ltd says it expects a 11 per cent increase in prices for metallurgical coal from its Curragh mine in Queensland in the ...
Saturday, 26 June 10
THE SUPRAMAX INDEX FOR S6 ROUTE WAS UP BY US$ 1091 PER DAY OR 5.7 PERCENT D-O-D -- VISTAAR
COALspot.com: The market appears to be steadying with all indices almost stabilizing and the drop much less than last two weeks.
The BDI softened ...
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- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
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- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
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- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
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- Central Electricity Authority - India
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- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
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- GVK Power & Infra Limited - India
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- Bangladesh Power Developement Board
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- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
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- Straits Asia Resources Limited - Singapore
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- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
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- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
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- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
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- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Romanian Commodities Exchange
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- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
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- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
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- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- White Energy Company Limited
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
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