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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, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
Thursday, 11 October 12
SINGAPORE BASED COAL SOURCE AND SHIPPING BAGS 300K MT IMPORTED COAL SUPPLY CONTRACT FROM TNPL
COALspot.com - India-based paper manufacturer Tamil Nadu Newsprint and Papers Limited has awarded a tender for 300,000 mt of imported steam co ...
Thursday, 11 October 12
PANAMAX : SINCE LAST WEEK RATES HAS FIRMED FOR ALL TRADES - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to East Med were around USD 14k and B ...
Thursday, 11 October 12
DRY BULK MARKET STEADY AFTER CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet staged a solid rebound after last week's holidays in China, as many would have expected. Indeed, many analysts were ...
Wednesday, 10 October 12
NEW BUILDING MARKET ON A QUIET WEEK, DUE TO ASIAN HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The newbuilding ordering activity has been more than quite during the course of the past week, as a result of holidays in both Korea and China. Acco ...
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- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- The University of Queensland
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
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