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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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Wednesday, 10 October 12
TAPPING OPPORTUNITIES WITHIN GLOBAL ECONOMIC PERSPECTIVE
Press Release: Mining sector will continue to play a significant role in supporting industrial and economic development in Indonesia which is curren ...
Tuesday, 09 October 12
REALM RESOURCES RECOMMENCES DRILLING AT KATINGAN RIA COAL PROJECT
COALspot.com : Realm Resources Ltd. (ASX) has announced that it has commenced work on the phase three technical programme at its Katingan Project in ...
Sunday, 07 October 12
INDONESIAN GOVERNMENT DECLARED HBA FELL AGAIN IN OCTOBER
COALspot.com - The Indonesian government’s declared coal reference price has lost US$ 0.17 per MT M-M.
The monthly coal referen ...
Saturday, 06 October 12
CFR SOUTH CHINA COAL SWAPS FOR DECEMBER'13 DELIVERY GAINED 1.3 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery gained 0.098 percent and 0.164 percent W-W and D-D respectively o ...
Saturday, 06 October 12
FREIGHT MARKET IS LIKELY TO PICK AFTER THE HOLIDAYS IN CHINA - VISTAAR
COALspot.com - The freight market appeared to be seeing some increase BDI up by 14.23 pct closing at 875 points. The Cape and Panamax index also saw ...
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- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
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