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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, 29 April 10
SOUTH AFRICAN ROUNDS BACK TO INDIA SUPRAS CAN ACHIEVE AROUND MID 20S
Handy
Atlantic markets remain firm. Supramaxes open in USG are now achieving low/mid&n ...
Thursday, 29 April 10
KANGAROO RESOURCES INKS KEY COAL EXPORT CONTRACT WITH YUDEAN FARNON - PROACTIVE INVESTORS
Proactive Investors reprted that, Kangaroo Resources has secured an initial export sales contract for coal from the company’s operating coal p ...
Wednesday, 28 April 10
UNITED TRACTORS FOCUSES ON MINING AS IT SEEKS TO DIVERSIFY REVENUE SOURCES - JG
The Jakarta globe reported that, PT United Tractors, Indonesia’s biggest heavy-equipment distributor and mining contractor, aims to have its m ...
Wednesday, 28 April 10
DRY BULK MARKET
After a prolonged period of anticipation and a stalled dry bulk market in terms of freight rates, the industry’s benchmark, the Baltic Dry Ind ...
Tuesday, 27 April 10
CAPESIZES UP, PANAMAXES DOWN - BRS
It was Capesizes up, Panamaxes down this week as the latter experienced a correction after its recent gains. Period rates for Panamaxes remain firm ...
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- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Parliament of New Zealand
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
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