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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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Monday, 24 May 10
INDONESIAN COAL PRICE REFERENCE (HBA) FOR MAY 2010 REACHES US$ 92.07 PER TON FOB VESSEL
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has released Indonesian coal price reference (HBA) for Month of M ...
Monday, 24 May 10
PAMA TO CLOSE COALS ACQUISITION IN 2010
Insider Stories reported that, Indonesia's largest coal mining contractor PT Pamapersada Nusantara, subsidiary of PT United Tractors Tbk (UNTR), wi ...
Sunday, 23 May 10
SINGARENI LEVIES PREMIUM TO BALANCE COAL DEMAND - BUSINESS STANDARD
Business-Standard reported that, In view of the rising demand for coal, Singareni Collieries Company Limited has recently levied a premium on c ...
Saturday, 22 May 10
THE BRENT CRUDE PRICES WAS SHARPLY DOWN AT US$ 71.72 PER BARREL - VISTAAR SHIPPING
COALspot.com: The freight market was under pressure with the caps size index down by 10 pct with uncertainty in Europe crisis continuing.
The BD ...
Saturday, 22 May 10
PORT CONGESTION IN AUSTRALIA HELPING RATES CHINA COAL IMPORT BOOM TO CUSHION FREIGHT RATES
China's record coal imports this year will provide some support to freight rates but growing pressure from fleet oversupply is set to limit gains. ...
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- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- ASAPP Information Group - India
- PTC India Limited - India
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
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