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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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Sunday, 23 September 12
AN ANOTHER UNSTABLE WEEK FOR INDONESIAN COAL SWAPS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.10 percent and 0.916 percent WOW and DOD respectively ...
Sunday, 23 September 12
INDIA IMPORTED 11.40 PERCENT MORE INDONESIAN COAL IN AUGUST
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 26,451,565* tons of coal in August 2012, compared to 27.88* mill ...
Saturday, 22 September 12
SOFT BUNKER PRICES KEEP INDONESIA TO INDIA FREIGHTS STABLE - VISTAAR
COALspot.com - The freight market overall remained buoyant with all indices up except for Panamax index. The main effect seems to be increased shipm ...
Friday, 21 September 12
SHIP BREAKING ACTIVITY REACHES NEW RECORDS, AS ALREADY 2012 LEVELS HAVE SURPASSED THE WHOLE OF 2011 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The vast oversupply of vessels, most notably in the dry bulk shipping sector, has forced ship owners to intensify their efforts towards recycling th ...
Thursday, 20 September 12
SUPRAMAX : INDO-INDIA ROUNDS WERE AROUND USD 12K - FEARNLEYS
Handy
Not a bad week for Supramax tonnage, if we compare Supramax developments to the bigger size tonnage. The rates have basically remained unchan ...
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- Sical Logistics Limited - India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
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