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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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Thursday, 08 April 10
NAPOCOR GETS ONE OFFER AT COAL TENDER - ABS CBN
ABS- CBN News reported that, Philippine power producer National Power Corp. (Napocor) is likely to buy 50,000 tons of steam coal from PT Berau Coal ...
Wednesday, 07 April 10
DRY BULK MARKET LOOKING FOR DIRECTION
The dry bulk market has kept a low profile during the past week, as evidenced by the small changes of a usually rather turbulent Baltic Dry Index (B ...
Tuesday, 06 April 10
NEWCASTLE COAL EXPORTS RISE 24%, SHIP QUEUE SHORTENS - BLOOMBERG
Bloomberg reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel used in power st ...
Tuesday, 06 April 10
UAE STEEL TRADERS FEAR LOSSES ON GLOBAL HIKE
A sudden spurt in the price of iron ore in the international market has caught local steel traders and manufacturers and a host of other steel-depen ...
Tuesday, 06 April 10
ASIAN INVESTORS EYE NIGERIA MARITIME INDUSTRY
Investors from the Asian region are considering investing in the Nigerian maritime sector, which has huge opportunities and potential. One of such p ...
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- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
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