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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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Saturday, 10 April 10
VESSELS OPEN N. CHINA WERE SEEN FIXED AT HIGH TEENS FOR TRIP VIA INDONESIA TO INDIA - VISTAAR SINGAPORE
COALspot.com: The BDI indices was almost at same levels was down by only 2.6 pct.
The cape index was down by almost 13 pct, which appears to be s ...
Saturday, 10 April 10
KRISHNAPATNAM PORT GROWS BY ALMOST 100% IN ITS SECOND YEAR OF OPERATIONS
COALspot.com ( Press Release): It has been a year of setting numerous records for Krishnapatnam Port. Krishnapatnam Port is only in its second year ...
Saturday, 10 April 10
TRANS-ASIA SEEKS SEMIRARA, INDO SUPPLIERS FOR COAL POWER PLANT - MANILA STANDARD TODAY
Manila Standard Today reported that, Trans-Asia Oil & Energy Development Corp., a unit of the Phinma Group, will tap Semirara Mining Corp. ...
Thursday, 08 April 10
THE FAR EAST SHIPPING MARKET FIRMING SINCE THE LAST WEEK
Handy
Little fresh interest early this week after the holidays. The BSI saw yest ...
Thursday, 08 April 10
INDONESIAN ENERGY MINISTRY SEEKS LONGER MINING CONTRACTS - THE JAKARTAGLOBE
The Jakarta Globe reported that, Energy Minister Darwin Zahedy Saleh said he would seek to amend the mining law to address investors’ complain ...
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- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- The University of Queensland
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Australian Coal Association
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
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