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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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Monday, 19 April 10
PLN TO OPERATE COAL MINES IN BID TO FUEL POWER PLANTS
The Jakarta Globe reported that, state electricity utility PT Perusahaan Listrik Negara said on Sunday that it aimed to take over operation of small ...
Sunday, 18 April 10
GOVT FORMS PANEL FOR RS 12,000-CR (US$ 2.711 BILLION) COAL INDIA IPO - ECONOMIC TIMES
Economic Times reported that, the government has formed an inter-ministerial panel to carry forward the proposed Rs 12,000-crore (US$ 2.711 billion) ...
Sunday, 18 April 10
THE FUTURES FOR THREE YEARS (2010-2012) FOR PANAMAX WAS AT AROUND US$ 21500 PER DAY - VISTAAR
COALspot.com: The BDI indices up by 3.30 pct and overall market continued to be firm except for India to Fareast.
“The cape index for the f ...
Saturday, 17 April 10
DRY BULK MARKET EDGES HIGHER ON STRONGER DEMAND
The dry bulk market managed to inch higher by the end of the week as brokers indicated that stronger cargo demand pushed freight rates that much hig ...
Friday, 16 April 10
KRISHNAPATNAM PORT IS IRONING ITS WAY INTO RECORD BOOKS
COALspot.com: Krishnapatnam Port achieved a new benchmark by loading 60,021 MT of Iron Ore fines in just 24 hrs surpassing its previous record of 54 ...
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- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- White Energy Company Limited
- London Commodity Brokers - England
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
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