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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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Saturday, 08 September 12
INDO INDIA ROUTE FREIGHT FOR SUPRAMAX REMAINS STRONG - CAPT. REDDY
COALspot.com - The freight market overall remained weak and except for cape index all other sectors were down. The biggest drop was in the Panamax s ...
Saturday, 08 September 12
RIO TINTO COMPLETES ACQUISITION OF BHP BILLITON'S INTERESTS IN RICHARDS BAY MINERALS
Rio Tinto has doubled its holding in Richards Bay Minerals (RBM) following the completion of its acquisition of BHP Billiton’s entire inte ...
Friday, 07 September 12
HBA GAINS $ 1.56 PER MT IN SEPTEMBER
COALspot.com - The Indonesian government’s declared coal reference price has gained US$ 1.56 per MT M-o-M. This is the first gain ...
Thursday, 06 September 12
SOME ANCHORED PANAMAX VESSELS WAITING FOR CARGOS TO COME
Handy
According to Fearnleys weekly report, in the smaller segments Fearnleys sees little to no changes since last week. There are still entering s ...
Thursday, 06 September 12
DRY BULK CARRIERS STILL IN HIGH DEMAND AMONG SHIP OWNERS, BUT NEWBUILDING ACTIVITY SLIDES IN AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The slide of the dry bulk market this year hasn't abated ship owners' appetite for dry bulk carriers, as evidenced by the steady interest expresse ...
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- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Bhatia International Limited - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
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