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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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Friday, 28 May 10
CHINESE BAN TO HIT INDIAN IRON ORE EXPORTS
Nearly half of India's iron ore exports to China are in serious danger of being wiped out. The local government has imposed a ban on import of low ...
Friday, 28 May 10
INDIAS NEYVELI LIGNITE EYEING INDONESIA, SOUTH AFRICA COAL MINES
Integrated mining and power producer Neyveli Lignite Corporation Thursday said it is exploring possibilities for buying coal mines in Indonesia and ...
Friday, 28 May 10
ADARO ACQUIRES 25% ICP AT US$ 335 MIO
Indonesia's second largest thermal coal miner PT Adaro Energy Tbk (ADRO) today announces formation of new joint venture for Indonesian Coal Project ...
Thursday, 27 May 10
KPCL IS LOOKING FOR 0.50 MLN TON TO IMPORTED STEAMING COAL FOR RAICHUR THERMAL POWER STATION
COALspot.com: KARNATAKA POWER CORPORATION LIMITED, India invited from reputed parties meeting the pre qualifications stipulated for the import ...
Thursday, 27 May 10
TNPL TO BUY 0.240 MLN TON NON-COKING COAL FOR SECOND HALF OF 2010
COALspot.com: Tamil Nadu Newsprint and Papers Limited (TNPL), would like to procure 0.24 mln MT of imported Non-Coking Coal in 6 Shipments of about ...
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- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
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