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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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Wednesday, 21 April 10
INDONESIA SHIPPED 13.24 PERCENT MORE COAL IN MARCH THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 27,615,191 MT of coal in March 2010, compare to 24.38 million tons in January and ...
Tuesday, 20 April 10
INDO HARUM ENERGY WINS US$200MN LOAN PLEDGE FROM BANK SYNDICATE
Indonesian coal producer PT Harum Energy has secured a loan commitment of US$200 million from a syndicate of six banks.
Bank of Tokyo Mitsubishi ...
Tuesday, 20 April 10
PACIFIC SUPRA MARKET WAS STILL SOFTENING - BRS
A modest increase in dry bulk rates this week with activity picking up in the middle of the week. Panamax rates remain above the Capes, and there wa ...
Monday, 19 April 10
IS CHINA TO SUFFER NEW COAL SUPPLY SHORTAGE IN 2010? - XINHUA
Is China likely to suffer a new coal supply shortage in 2010? It's a question haunting many Chinese market analysts now. After a string of several ...
Monday, 19 April 10
WHITE ENERGY BUYS SA COAL - ABC NET
ABC Net reported that, South Australian Coal Limited is being bought by the New South Wales company White Energy.
Shareholders will get a combine ...
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- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
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