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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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Tuesday, 15 June 10
INDONESIA'S COAL EXPORTS FELL TO 18.52 - MILLION TONS IN MAY
COALspot.com: Indonesia, the world largest coal exporter, shipped 18,529,695 of coal in May 2010. May coal exports dropped by 20.61 percent co ...
Monday, 14 June 10
S. AFRICA BOOSTS COAL SALES TO INDIA 12%, TRADER SAYS
Bloomberg reported that, South Africa’s Richards Bay, the world’s second-biggest coal export harbor, boosted sales to India by 12 percen ...
Sunday, 13 June 10
THE FUTURES FOR THREE YEARS (2010-2012) WAS AT AROUND CAPE/US$ 29000 PER DAY & PANAMAX/US$ 20500 PER DAY - VISTAAR
COALspot.com: The market continue to soften in all sectors and the most affected was cape size which was down by 16.32 pct. The BDI was down by 14.4 ...
Saturday, 12 June 10
BALTIC EXCHANGE ESTABLISHES ASIA-PACIFIC OFFICE
The London-based Baltic Exchange has today announced it is setting up an Asia-Pacific Representative Office in Singapore, to ensure closer contact w ...
Saturday, 12 June 10
NALCO TO ROPE IN PARTNERS FOR INDONESIA PROJECT
Sify reported that, the public sector National Aluminium Company (Nalco) is set to finalise the terms of its joint venture (JV) agreement with two f ...
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- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Planning Commission, India
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
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