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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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Thursday, 24 June 10
DRY BULK MARKET AT LOWEST POINT IN EIGHT MONTHS
The dry bulk market’s demise has failed to turn around so far this week, with the industry’s benchmark, the Baltic Dry Index (BDI), yest ...
Wednesday, 23 June 10
WILHELMSEN SHIPS SERVICE OPENS NEW OFFICE IN KRISHNAPATNAM PORT INDIA
Wilhelmsen Ships Service has opened a branch office in Krishnapatnam port on the east coast of India according to statement released by company ...
Wednesday, 23 June 10
PTC'S INDONESIAN COAL-MINING FORAY-I: TO INVEST USD 69 MILLION VIA OVERSEAS SPV
Moving ahead with its plans to acquire coal assets abroad, the power trading major, PTC India Limited, has decided to invest a total of USD 69 milli ...
Tuesday, 22 June 10
INDIA HAS REPORTED MORE COAL IMPORTS FROM COLOMBIA
A second consecutive week of sharp corrections for the dry bulk market, although some of the softness could be attributed to Chinese holidays at the ...
Monday, 21 June 10
THE SUPRAMAX INDEX IN THE FAR-EAST (S6 ROUTE) WAS DOWN BY $ 1300 PER DAY - VISTAAR
COALspot.com: The market continued to soften in all sectors last week also with the BDI dropping by 18.07 pct and Cape index by 26.71 pct.
The BD ...
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- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Planning Commission, India
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- The University of Queensland
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Parliament of New Zealand
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