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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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Saturday, 26 June 10
MONGOLIA COAL RAILWAY TO LINK WITH RUSSIA - BUSINESS WEEK
Business Week reported that, Mongolian lawmakers have approved plans for a rail line linking with Russia to help tap large coal deposits in the sout ...
Friday, 25 June 10
INDIAS THIRD-LARGEST SHIPPING COMPANY BAGS US$ 31 MILLION DEAL WITH SL
Daily Mirror reported that, Mainboard-listed and India-owned dry bulk shipping firm Mercator Lines says it has won a US$ 31 million contract in Sri ...
Friday, 25 June 10
DEMAND FOR COAL COULD BE GRADUALLY RETURNING - FEARNBULK
Handy
Atlantic markets seeing more activity today (23 June 2010) after a slump the last weeks. Supramax vessels open in USG are achieving low/mid ...
Thursday, 24 June 10
INDONESIAS BUMI DECLARED US$ 57.1 MILLION (AMOUNTING TO 30% OF 2009 NET INCOME) AS DIVIDEND
COALspot.com: PT Bumi Resources, Tbk’s Annual General Meeting (AGM) today was successfully held with a quorum of 75.89% resulting in sharehold ...
Thursday, 24 June 10
CHINA TARGETS 3.6 BILLION MT ANNUAL COAL OUTPUT FOR 2015
At a forum in Beijing entitled "Chinese energy strategy and energy development in the 12th five-year plan period (2011-2015)", He Youguo, ...
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- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Mercator Lines Limited - India
- White Energy Company Limited
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- VISA Power Limited - India
- The University of Queensland
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
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