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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, 17 May 10
INDONESIA SHIPPED 15.51 PERCENT LESS COAL IN APRIL THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23,331,542 MT of coal in April 2010, compare to 27.61 million tons in ...
Monday, 17 May 10
S. AFRICA CUTS EUROPE COAL SUPPLY, ASIA SALES RISE, TRADER SAYS - BLOOMBERG
Bloomberg reported that, South Africa’s Richards Bay Coal Terminal, Europe’s biggest source of the fuel burned for power, cut shipments ...
Monday, 17 May 10
GREEK CRISIS TO SEE FREIGHT RATES FALL BANGKOK POST
The Greek debt crisis will likely cause shipping rates to fall this quarter enabling SET-listed Precious Shipping Plc to buy second-hand vessels at ...
Monday, 17 May 10
NEWCASTLE COAL QUEUES COULD BE HISTORY - THE HERALD
NEWCASTLE'S infamous coal queues could be a thing of the past if a plan to have the ships anchor over the horizon succeeds against the doubts of it ...
Sunday, 16 May 10
THREE FIRMS SHORTLISTED FOR CIL'S $ 2BN OVERSEAS PROJECTS - ECONOMIC TIMES
Economic Times reported that, State-owned Coal India Ltd (CIL) has shortlisted US firms Massey Energy and Peabody Energy, besides Indonesian Novem/S ...
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- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- PTC India Limited - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Australian Coal Association
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
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