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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, 28 September 12
DRY BULK SECOND HAND VESSELS ON HIGH DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the demise of the dry bulk market and the collapse of freight rates since the beginning of 2012, on the back of record breaking newbuilding ...
Thursday, 27 September 12
MINING RE-COMMENCES AT ORPHEUS' B2 EAST KALIMANTAN COAL PROJECT
- B2 project overburden removal completed and coal exposed
- Coal getting has commenced with target production of 30,000tpm
- Orpheus to re ...
Thursday, 27 September 12
HANDY: THE PACIFIC MARKET IS GETTING WEAKER WITH UPCOMING GOLDEN WEEK HOLIDAYS - FEARNLEYS AS
Handy
Yet another week with rates softening in all trades. Especially owners with ships open Continent struggle to find employment paying decent mo ...
Thursday, 27 September 12
DRY BULK MARKET LOSES STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The rise of the BDI (Baltic Dry Index), the dry bulk industry’s benchmark during the course of the previous week, proved to be short-lived, as ...
Wednesday, 26 September 12
NEWBUILDING ORDERING ACTIVITY REMAINS SUBDUED ON GLOBAL MARKET UNCERTAINTY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding ordering activity has been on the down side during the past few weeks, a trend also noticeable during the course of the past few days, a ...
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- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Australian Coal Association
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- London Commodity Brokers - England
- Posco Energy - South Korea
- VISA Power Limited - India
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
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