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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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Monday, 20 August 12
CHINESE COAL SWAPS RISE, INDONESIAN COAL CONTRACTS SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost -2.05 percent W-o-W on Friday (17 August 2012) closing but gained ...
Saturday, 18 August 12
BULK FREIGHT MARKETS CONTINUED THEIR DECLINE IN LINE WITH WEAK DEMAND - VISTAAR
COALspot.com - This week also the indices fell on all segments with BDI touching lowest in almost 3 years.
The BDI closed at 714 points down by 7 ...
Thursday, 16 August 12
PUBLIC PRIVATE PARTNERSHIPS CONFERENCE 2012
Press Release - Asia’s Premier Public Private Partnerships Conference 2012 will showcase commercial opportunities for investors and developers ...
Wednesday, 15 August 12
UT GENERATED RP 3.09 TRILLION NET INCOME
COALspot.com - As of June 2012 Indonesia’s heavy equipment market grew 14%, from 8,448 units to 9,618 units (based on UT’s internal mark ...
Tuesday, 14 August 12
SAKARI ENTERED INTO JV IN CAMBODIA TO EXPLORE COAL OPPORTUNITIES
COALspot.com - Sakari joints hands with The Royal Group of Companies in Cambodia to explore and develop coal opportunities throughout the country.
...
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- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Planning Commission, India
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- CNBM International Corporation - China
- GMR Energy Limited - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
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