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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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Tuesday, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
Monday, 29 October 12
US COAL EXPORTS ARE EXPECTED TO REACH 125 MILLION TONS THIS YEAR - EIA
COALspot.com - US coal exports are expected to reach 125 million tons this year, surpassing the old record of about 113 million tons set in 1981, sa ...
Sunday, 28 October 12
SUB-BIT INDONESIA COAL SWAPS (FOB ) FOR DECEMBER 2012 DELIVERY STAYED FLAT D-D
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery flat on D-D but gained 0.38 percent on W-W on Friday, 26 October 2012, ...
Sunday, 28 October 12
INDONESIA TO INDIA SUPRAMAX FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - The Cape size sector continued to remain active with iron ore movement being steady. All other sectors were down.
The BDI was up b ...
Friday, 26 October 12
SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to ...
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- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
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