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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, 25 August 12
FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - This week the indices showed some signs of improvement will all the segments moving up except for the handy size.
The BDI was marg ...
Saturday, 25 August 12
INDONESIAN COAL SWAP REMAINS STABLE AT LOW LEVEL
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery gain 0.804 percent W-o-W on Friday (24 August 2012) closing but lost 0. ...
Thursday, 23 August 12
INDONESIA-INDIA, LARGE ECO SUPRA FIXED AT USD 6K FOR DELIVERY SOUTH CHINA - FEARNLEYS AS
Handy
The market continued the same trend as last week, low activity and holidays in some countries.
Rate wise unchanged, with US Gulf/Continent ...
Thursday, 23 August 12
EGCO GROUP EXPANDS TOWARDS INTEGRATED ENERGY BUSINESS WITH INVESTMENT IN INDONESIAS COAL MINE
Electricity Generating Public Company Limited or EGCO Group, the Thailand’s first Independent Power Producer has continually invaded foreign m ...
Thursday, 23 August 12
EGCO GROUP ANNOUNCES 2 BILLION BAHT PROFITS IN Q2/2012
Successfully Establishes Integrated Energy Business and Strengthen Investments in ASEAN
Mr. Sahust Pratuknukul, President of Electri ...
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- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
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