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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, 04 October 12
CAPESIZE : IN SPITE OF THE HOLIDAYS IN CHINA, RATES ARE CLIMBING UP - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to east Med were around USD 13k and Black ...
Wednesday, 03 October 12
BARCLAYS'S PRICE FORECAST FOR NEWCASTLE COAL HAS BEEN WRITTEN DOWN
“ The main story in the global coal markets has been the growth in supply, with all of the major exporters adding volumes into a market which ...
Sunday, 30 September 12
SUB-BIT INDONESIA COAL SWAPS: MIXED TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 0.73 percent w-o-w but gained 0.41 percent d-o-d on Friday, 28 Se ...
Sunday, 30 September 12
INDONESIA HAS NO PLAN TO CAP COAL PRODUCTION
COALspot.com - “The current low coal prices were mainly due to a global oversupply condition, spurred by numerous mining exploitations in the ...
Sunday, 30 September 12
FREIGHT MARKET UNDER PRESSURE; OVERALL SENTIMENTS ARE STILL BEARISH
COALspot.com - The freight market seemed to have lost steam and all indices were down except for cape index.
The BDI was slightly down by 6 point ...
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- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Australian Coal Association
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