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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, 03 June 10
INDO GOVERNMENT TRIES TO CALM BUSINESSES FEARS OVER FOREST - CLEARING MORATORIUM
The Jakarta Globe reported that, as producers of coal and palm oil continued to howl, the government on Tuesday offered reassurances that the develo ...
Thursday, 03 June 10
GOVT CONSIDERING IMPORT PARITY PRICE FOR DOMESTIC COAL
The government on June 1 said it is considering to price domestic coal on par with global rates, a move which may increase the cost of the raw mater ...
Wednesday, 02 June 10
SRI LANKA TESTS 1ST COAL POWER PLANT IN SEPT.
Sri Lanka will start testing its first 300 MegaWatt coal power plant in September with plans to connect it to the national distribution grid by Janu ...
Wednesday, 02 June 10
CHINA'S IRON ORE IMPORTS TO KEEP BEING THE BIGGEST FACTOR FOR DRY BULK FREIGHT RATES SAY READERS
With dry bulk freight rates staging a positive rally during most of May, the industry’s main benchmark, the Baltic Dry Index (BDI) has managed ...
Wednesday, 02 June 10
KIDECO TO PRODUCE 29.5 MILLION TONS OF COAL IN 2010
COALspot.com: Kideco to produce 29.5 million tons of coal in 2010 up 4.8 million or about 19 percent up from 2009 production. Kideco produced 24.7 m ...
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- Central Electricity Authority - India
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Eastern Coal Council - USA
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
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