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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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Wednesday, 29 August 12
COLOMBIA'S MINING BOOM: PART ONE - JOSEPH KIRSCHKE
COALspot.com - Colombia stands before one of the potentially largest, most diversified mining booms in the world. Untold reserves of gold, coal, cop ...
Wednesday, 29 August 12
SECOND HAND VESSELS IN HIGH DEMAND DESPITE SUMMER SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the slow summer season, ship owners appear to be rather keen in acquiring some modern second hand tonnage at "knock-down" prices. ...
Monday, 27 August 12
BUMI BOOKS $322.1 MILLION NET LOSS IN 1H 2012 IN SPITE OF 8.6 PERCENT INCREASE IN SALES REVENUE
PT Bumi Resources Tbk, the single largest coal producer and exporter in Indonesia announces its first half financial report for the ...
Monday, 27 August 12
OVER 200 FOREIGN COMPANIES AND ENERGY MAJORS EXPECTED AT 2ND MOGP SUMMIT IN YANGON
Singapore based CMT and Machinery & Solutions Co. Ltd (M&S) announce that the 2nd MOGP Summit will be held on 3-6 September at the Sedona ho ...
Sunday, 26 August 12
SOUTH AFRICAN COAL OVERVIEW
South Africa's indigenous energy resource base is dominated by coal.
Internationally, coal is the most widely used primary fuel, accounting for ...
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- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Central Electricity Authority - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- White Energy Company Limited
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
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