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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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Sunday, 20 June 10
OUR COAL: ITS DEVELOPMENT AND CONTROVERSIAL ISSUES
Indonesia’s production of coal has been growing amazingly. In the mid 1980s, national coal production was less than 1 million tons per annum, ...
Saturday, 19 June 10
STRONG DEMAND, RISING PRODUCTION SETTING SCENE FOR COAL BONANZA - THE JAKARTA GLOBE
The Jakarta globe rerported that, As the nation’s coal miners enjoy burgeoning demand from energy-hungry economies such as China and India, th ...
Saturday, 19 June 10
DRY BULK MARKET DOWN ON CHINESE SLOWDOWN FEARS
Dry bulk freight rates have been on a freefall for more than two weeks now, something which has caused the industry’s benchmark, the Baltic Dr ...
Saturday, 19 June 10
COAL INDIA KEEN ON BLOCK DEVELOPMENT IN INDONESIA - THE HINDU BUSINESS LINE
Expanding horizon
Agreement by the Indonesian Government is likely to help CIL gain foothold in India's largest sourcing point of thermal coal.
...
Friday, 18 June 10
THE PANAMAX MARKET CONTINUED ITS SOFTENING TREND - FEARNBULK
Handy
Flat Atlantic markets with most markets in ´slow mode´ due to holidays in China.
Supramax vessels open in the USG are achievi ...
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- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
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- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
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- Ministry of Transport, Egypt
- Wilmar Investment Holdings
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- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
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- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- India Bulls Power Limited - India
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
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- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- ICICI Bank Limited - India
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- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
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