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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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Tuesday, 11 May 10
DRY BULK RATES SHOOT UP ON STRONG CARGO DEMAND
The dry bulk industry’s benchmark, the Baltic Dry Index (BDI) has kept its momentum, as predicted by analysts and shipping experts, managing t ...
Saturday, 08 May 10
THE FUTURES FOR THREE YEARS (2010-2012) WAS AT AROUND PANAMAX / $ 21500 & SUPRAMAX / $ 18500 PER DAY - VISTAAR SHIPPING
COALspot.com: The BDI continued to go up and was up by 7.57 pct even though the stock markets was severely affected with worries on Greek debt crisi ...
Saturday, 08 May 10
MAHAGENCO TO IMPORT 3.35 MILLION TON OF COAL
COALspot.com: Indian utility Maharashtra State Power Generation Co. Ltd. is in market for 3.35 million tones of imported coal. The purchase of coal ...
Saturday, 08 May 10
NAPOCOR BUYS 122,000 TONS COAL - ABC CBN NEWS
ABC - CBN News reported that, State-run National Power Corp. (Napocor) said on Thursday it awarded 2 contracts for the supply of a total 122,000 ton ...
Saturday, 08 May 10
RICHARDS BAY COAL SHIPMENTS FALL TO AN 11-MONTH LOW - BLOOMBERG
Bloomberg reported that, Coal shipments from Richards Bay Coal Terminal, Africa’s biggest export facility for the fuel, fell to an 11-month lo ...
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- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- The University of Queensland
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
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