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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, 10 June 10
CHARTERERS ARE NOT WILLING TO PAY THE RATES AS MARKET SLIDES
DRY BULK
Handy
Atlantic markets are quieter (Posidonia?) with less activity. Nevertheless expect some fresh enquiries f ...
Thursday, 10 June 10
R-POWER, INDONESIA'S SUGICO INK PACT TO ACQUIRE COAL MINES - ECONOMIC TIMES
Economic Times of India reported that, Anil Ambani-owned Reliance Power has signed a share-sale agreement with Indonesia’s Sugico Group to acq ...
Thursday, 10 June 10
PARAMOUNT MINING CORPORATION REPORTS KEY INDONESIAN JV AGREEMENT
Indonesia focussed Paramount Mining Corporation has reported that its Indonesian subsidiary, PT Paramindo, has concluded a Joint Venture Agreem ...
Wednesday, 09 June 10
INDIA, CHINA TO PROP UP THERMAL COAL DEMAND - COMMODITY ONLINE
Commodity Online : Weakness in thermal coal demand in OECD will continue to be offset by growth in demand in India and China. Therefore, the s ...
Tuesday, 08 June 10
TATA POWER LOOKING TO PICK UP STAKE IN OVERSEAS COAL MINES - ECONOMIC TIMES
Economic Times reported that, Tata Power is looking for a strategic stake purchase in coal mines of Indonesia or South Africa to fuel its upcoming 1 ...
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- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Australian Coal Association
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- MS Steel International - UAE
- Marubeni Corporation - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
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