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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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Friday, 16 April 10
RBCT COAL DISPUTE RESOLVED - MININGMX
Miningmx reported that, the long-simmering spat over the coal allocation for producers who will use the expanded facilities at Richards Bay Coal Ter ...
Friday, 16 April 10
COAL INDIA SELECTS MERCHANT BANKERS TO ACQUIRE OVERSEAS ASSETS -THE HINDU
An investment of about $1.8 billion is expected to be made in these deals
The Hindu reported that, Bank of America-Merill Lynch, Royal Bank of Sc ...
Thursday, 15 April 10
MAJOR THERMAL COAL CONTRACT AT 40% HIGHER PRICE THAN LAST YEAR - BUSINESS STANDARD
Business-Standard reported that, India is expected to import nearly 60 million tonnes of thermal coal this year.
After coking coal and iron ...
Thursday, 15 April 10
RICHARDS BAY ROUNDS BACK TO INDIA SUPRAS WERE FIXED AT MID 20'S
Handy
The BSI remains in a positive momentum and the Atlantic remains unchanged from last week. Fronthaul grain is active which is keeping ballast ...
Thursday, 15 April 10
DRY BULK MARKET SLOWLY GAINING GROUND
The troubled and underperforming capesize sector of the dry bulk market has been experiencing an improved sentiment since Tuesday, a trend verified ...
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- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- The University of Queensland
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- PTC India Limited - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
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