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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, 14 August 12
SAKARI SIGNS HEADS OF AGREEMENT TO ACQUIRE SIX COAL CONCESSIONS IN INDONESIA
COALspot.com - Sakari has signed a Heads of Agreement (HOA) to acquire a 100% interest in up to six IUPs, covering an area of over 29,000 hectares, ...
Tuesday, 14 August 12
UNCERTAIN FUTURE FOR DRY BULK PANAMAX SHIPS - DREWRY / HELLENIC SHIPPING
The dry bulk shipping market is in a poor state, with the Capesize segment the worst of all. Unfortunately, the latest analysis from Drewry Maritime ...
Monday, 13 August 12
5TH VIETNAM PORTS AND LOGISTICS 2012
Press Release - Co-hosted by VINAMARINE, the 5th Vietnam Ports and Logistics2012 will feature dedicated sessions on port and transport infrastructur ...
Monday, 13 August 12
ACTIVE DRY BULK FLEET INCREASES BY 8% SO FAR IN 2012 IN TERMS OF TONNAGE CAPACITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s no wonder that the dry bulk market has been tethering since the start of the year. the overflow of tonnage has been so enormous, that eve ...
Sunday, 12 August 12
COAL FREIGHT RATES FALL FLAT TO SOFT ON OVERSUPPLY, WEAK DEMAND - VISTAAR SINGAPROE
COALspot.com - The BDI continued its fall 10th August.
This week all segments were down including BDI down by 9.15 pct closing at 774 points .The ...
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- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Parliament of New Zealand
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- PTC India Limited - India
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- The University of Queensland
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Malabar Cements Ltd - India
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