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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, 16 October 12
DRY BULK FREIGHT RATES COULD IMPROVE ON CHINESE STIMULUS AND WINTER CARGO DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO has given out its forecast for the next six weeks, in terms of freight rates for dry bulk carriers. According to them, Capesize TC Average rat ...
Monday, 15 October 12
IT'S STRICTLY COME CHARTERING - CLARKSON RESEARCH SERVICES
The charter market is a bit of a dance between ship owner and charterer: one leader, one follower; one step, two steps, turn... The dance is symbiot ...
Sunday, 14 October 12
SUB-BIT INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS: SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery lost 0.329 percent w- w but gained 0.248 percent d-d on Friday, 12 Oct ...
Sunday, 14 October 12
SUPRAMAX FREIGHT STEADY: PANAMAX FREIGHTS FIRM - VISTAAR
COALspot.com - The shipping market saw some hectic activity in the Cape and panamax sector and quite a lot of fixtures reported.
The BDI was up b ...
Friday, 12 October 12
HOW REAL IS THE THREAT OF PIRACY? - BIMCO
The threat of modern piracy remains serious, regardless of its seasonal variations and the fact that it is chiefly confined to the Indian Ocean, Gul ...
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- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
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- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
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- Ministry of Transport, Egypt
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- Agrawal Coal Company - India
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- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
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- Salva Resources Pvt Ltd - India
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- The Treasury - Australian Government
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- ASAPP Information Group - India
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- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
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- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
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- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
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- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
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- The University of Queensland
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- White Energy Company Limited
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
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- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
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- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
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- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- ICICI Bank Limited - India
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- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
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