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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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- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
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