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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, 27 April 10
S.KOREA EWP SEEKS 0.520 MILLION TONS OF SUB-BITUMINOUS COAL
COALspot.com: South Korea East West Power Company has called for term bids for supply of Sub-bituminous Coal for Dangjin Thermal Power Pla ...
Monday, 26 April 10
COAL INDIA NEARS PORT DEAL WITH VIZAG STEEL - DNA
DNA India reported that, Coal India Ltd (CIL), the country’s largest coal producer, is close to signing a deal to acquire space at Vizag Steel ...
Sunday, 25 April 10
THE WAITING AT INDIAN PORTS FOR COAL VESSELS WAS QUITE NORMAL - VISTAAR
COALspot.com: The BDI remained unchanged this week and all other sectors also the change was not much.
The cape index continued to move up and wa ...
Saturday, 24 April 10
NTPC TO BUY COAL MINES IN KAZAKHSTAN - TELEGRAPH INDIA
Telegraph India reported that, NTPC Ltd plans to acquire coal mines and operate two thermal power plants in Kazakhstan.
“We are exploring t ...
Saturday, 24 April 10
CHINA'S COAL IMPORTS DOUBLE IN MARCH
China's General Administration of Customs said that the country imported 15.22 million tons of coal last month, more than double the amount it impo ...
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- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- White Energy Company Limited
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- The University of Queensland
- Cement Manufacturers Association - India
- Australian Coal Association
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
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