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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, 06 August 12
3RD ANNUAL INDONESIA POWER
Press Release - 3rd Annual Indonesia Power is Indonesia’s premier power event, where commercial opportunities and new projects are identified. ...
Monday, 06 August 12
COAL EXPORTS COULD ADD $2B TO $6B ANNUALLY TO U.S. ECONOMY - HELLENIC SHIPPING
Business groups backing Pacific Northwest coal export proposals on Thursday lauded a new report that claims increased U.S. coal exports could bring ...
Sunday, 05 August 12
SUB-BIT INDONESIA COAL SWAPS ARE WAY UP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.36 percent on Friday (3 August 2012) closing W-o-W but gained& ...
Sunday, 05 August 12
INDONESIA'S ADARO TRIMS PRODUCTION FORECAST, CITES BAD ECONOMY - THE JAKARTA GLOBE
The Jakarta globe reported that, Adaro Energy, the country’s second-largest coal producer, has cut its annual production forecast to between ...
Sunday, 05 August 12
DRY BULK FREIGHT MARKET TO STAY WEAK NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com - The freight market continued to soften further in all segments.
The BDI was down by 8.68 pct closing at 852 points. The cape index ...
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- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- PTC India Limited - India
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