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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, 04 May 10
APRIL 2010 COAL PRICE REFERENCE WAS US$ 86.58/T FOB VESSEL
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has publishing a monthly coal price reference (HBA) to be used by ...
Tuesday, 04 May 10
DRY BULK MARKET SOFTENING AGAIN ON LACK OF DIRECTION
The dry bulk market has put on the brakes once again, after the last session of the Baltic Dry Index ended at 3,354 points, down 5 from the previous ...
Monday, 03 May 10
AUSTRALIA PLANS 40 PERCENT TAX ON MINING PROFITS - THE JAKARTA POST
The Jakarta Post reported that, Australia would heavily tax the booming profits of its mining companies under a tax system overhaul proposed Sunday ...
Saturday, 01 May 10
THE PERIOD ACTIVITY WAS QUITE FIRM DURING THE WEEK - CAPT. REDDY
COALspot.com: The BDI was up by 11.32 pct which was mainly due to the firmness in capsize index which was up by 21.55 pct .
The other sectors Pan ...
Saturday, 01 May 10
EXPANDED SA COAL TERMINAL TO START OPERATIONS ON MAY 1 - MINING WEEKLY
Mining Weekly reported that, In line with expectations, the Richards Bay Coal Terminal (RBCT) had completed the R1,2-billion Phase V expansion ...
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- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- VISA Power Limited - India
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Minerals Council of Australia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
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