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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, 08 June 10
RUSSIA REPORTED A TENFOLD GROWTH IN COAL EXPORTS TO CHINA IN 1Q 2010 - BRS
A retreat for all the dry bulk segments this week, but especially for the Panamax and Supramax markets. The Panamax 4TC remains over US$30,000/day h ...
Monday, 07 June 10
SOUTH AFRICA COAL STAYS NEAR 18-MONTH HIGH ON EUROPEAN DEMAND - BLOOMBERG
Bloomberg Reported that, Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, ...
Sunday, 06 June 10
THE DOWNWARD TREND FOR S6 AND S7 ROUTE IS LIKELY TO CONTINUE NEXT WEEK - VISTAAR
COALspot.com: "This seemed market heading for corrections with all sectors down", said, Capt. Reddy, MD of Vistaar Shipping Singapore, an ...
Sunday, 06 June 10
STEAM COAL MAY BECOME NEXT BOOMING COMMODITY IN AUSTRALIA - DB
Deutsche Bank predicts that thermal coal could become Australia's next booming commodity. The German investment bank's global thermal coal team ex ...
Friday, 04 June 10
INDO/INDIA AROUND THE MID 20'S LEVEL AND MID TO HIGH 20'S INDIA/CHINA
Handy
After a quiet end to last week, the Atlantic handysize market continued&nb ...
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- CNBM International Corporation - China
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Economic Council, Georgia
- Australian Coal Association
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Planning Commission, India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
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