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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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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competit ...
Tuesday, 04 September 12
ORPHEUS SECURES ADDITIONAL SIGNIFICANT KINTAP COAL PROJECT IN SOUTH KALIMANTAN
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced that it has secured a 50% equity ownership in an additional tenement ...
Monday, 03 September 12
SHIPOWNERS TO WAIT FOR FURTHER PRICE REDUCTIONS IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With September now upon us, shipbrokers are looking towards an interesting winter season, as ship owners are looking to capitalize on more second ha ...
Sunday, 02 September 12
ADAROS COAL ROYALTIES TO THE GOVERNMENT INCREASED BY 10.5 PERCENT Y-O-Y TO US$196.8 MILLION
COALspot.com - PT Adaro Energy Tbk (IDX: ADRO), the second largest power plant coal producer in Indonesia, announced its consolidated auditor-review ...
Saturday, 01 September 12
FALLING PRICES; BLEEDING MINERS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 4.070 percent and 0.422 percent respectively on W-o-W and D- ...
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- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- PTC India Limited - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Australian Coal Association
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
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