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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, 11 August 12
INDONESIAN COAL REFERENCE PRICE HAS LOST 27.78 PERCENT YOY
COALspot.com - Indonesian HBA fell again in August.
The monthly coal reference price for coal sales this month fell 3.32 percent. HBA fell ...
Saturday, 11 August 12
SUB-BIT INDONESIA COAL SWAPS SEEN MOVING IN THE RIGHT DIRECTION
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.29 percent W-o-W on Friday (10 August 2012) closing but lost 1 ...
Friday, 10 August 12
DRY BULK MARKET DROWNING FROM TONNAGE OVERSUPPLY - HELLENIC SHIPPING
The dry bulk market has been overflowing with new building vessels, despite the fact that demand is more or less (and minus the seasonal factors) ri ...
Thursday, 09 August 12
3RD ANNUAL SHALE GAS
Press Release - With the North American shale gas boom, IBC’s 3rd Annual Shale Gas explores optimal strategies to monetize Asia’s domest ...
Wednesday, 08 August 12
EXPLOITASI AIMS TO RAISE RP 2.7T FOR ACQUISITION - THE JAKARTA POST
The Jakarta Post reported that, publicly listed coal miner PT Exploitasi Energi Indonesia (CNKO) is seeking to raise Rp 2.7 trillion (US$286.2 milli ...
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- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- The University of Queensland
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
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