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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, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- The Treasury - Australian Government
- PTC India Limited - India
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- White Energy Company Limited
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
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