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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, 13 September 12
PANAMAX: THE NEGATIVE TREND, POOR SENTIMENT CONTINUES - FEARNLEYS AS
Handy
Lack of cargoes and a growing list of available ships is causing rates to slip for all Atlantic trades.
The only trade keeping somewhat s ...
Thursday, 13 September 12
FUEL EFFICIENT SHIPS MAY BE MORE EXPENSIVE, BUT THEY MAKE FINANCIAL SENSE SAYS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest trend in shipbuilding is the so called "Eco" ship, i.e. ships which offer much better fuel consumption and are more cost-effect ...
Wednesday, 12 September 12
INDIAS COALGATE: TIME FOR A ROOT CANAL
A recent report from India’s Comptroller and Auditor General (CAG) pertaining to the allocation of coal blocks has created a political storm i ...
Tuesday, 11 September 12
CLOUDY AND POLICY RISK INDONESIAN COAL INDUSTRY
COALspot.com - Bahana Securities in its latest coal outlook, commented on the Indonesian coal market, with economic slowdown in the four largest coa ...
Tuesday, 11 September 12
SHIP OWNERS KEEN ON SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With most ship owners back from their summer rest, things are starting to pick up again in the second hand vessel market, with more and more deals b ...
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- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- PTC India Limited - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Australian Coal Association
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
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