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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, 13 May 10
CHINA CONCERNS TO TEST RAW MINERALS - THE AUSTRALIAN
The Australian reported that, COMMODITY prices will remain volatile and drop from recent highs as China's appetite for raw materials softens. James ...
Thursday, 13 May 10
ACTIVITY ON WEST COAST INDIA IS SLOWING - FEARNLEYS AS
DRY BULK CHARTERING
Handy
Atlantic markets remain firm but more for end May/beg June dates as there seems to be more enquiries for those dates. ...
Thursday, 13 May 10
DRY BULK SHIP OWNERS CHEERFUL AMID MARKET RALLY
China’s appetite for raw materials like iron ore and coal, as well as a series of added factors are boosting demand for dry bulk carriers, hel ...
Wednesday, 12 May 10
BANPU'S Q1 PROFIT SLIDES 43% TO B2.71BN - BANGKOK POST
The Bangkokpost reported that, Banpu Plc posted a first-quarter net profit of 2.71 billion baht, down by 43% from the same period last year.
The ...
Tuesday, 11 May 10
DALRYMPLE BAY COAL EXPORTS HIGHEST SINCE JULY; NEWCASTLE FALLS - BLOOMBERG
Bloomberg reported that, Coal shipments from Australia’s Dalrymple Bay terminal in Queensland state rose to the highest in nine months in Apri ...
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- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
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- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
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