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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, 07 August 12
2ND ANNUAL FLOATING TERMINALS
Press Release - After a ground breaking and successful launch in 2011, the 2nd Annual Floating Terminals conferenceis back to address innovation, co ...
Tuesday, 07 August 12
KRISHNAPATNAM PORT HAS DISCHARGED 122,247 MTS OF COAL IN JUST 24 HRS
COALspot.com - Keeping with the tradition of the new records that are set at the Olympic Games 2012, Krishnapatnam Port has also achieved in setting ...
Tuesday, 07 August 12
THE JAKARTA POST EDITORIAL: REVISITING THE MINING LAW
The Jakarta post, one of the leading English news paper in Indonesia writes in its editorial today, what the domestic and foreign investors had drea ...
Tuesday, 07 August 12
BARAMULTI SET TO LIST ON BOURSE IN Q4 - JP
The Jakarta Post reported that, coal miner PT Baramulti Sukses Sarana is preparing to make its shares available to the public in the fourth quarter ...
Tuesday, 07 August 12
REALM RESOURCES COMPLETES STUDY ON ITS KATINGAN RIA COAL PROJECT
COALspot.com - Realm Resources Ltd. has announced that it has completed the Project Study for the Katingan Ria Project in Central Kalimantan, Indone ...
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- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- PTC India Limited - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
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