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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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Friday, 03 August 12
INDIA - LIGHTS OUT! - SALVA
The Indian power sector hit global headlines this week for all the wrong reasons. Firstly, on Monday, over 350 million people lost power across nort ...
Thursday, 02 August 12
OIL & GAS COMPANIES TO MEET IN MYANMAR FOR UPDATES ON NEW ROUND OF BIDDING AND INVESTMENT POTENTIAL IN UPSTREAM OIL, GAS, AND POWER GENERATION
Press Release - 2nd MOGP Summit (Myanmar Oil, Gas & Power) will convene in Yangon from 3 – 6 September 2012, to unveil new round of biddin ...
Thursday, 02 August 12
DRY BULK MARKET RATES CONTINUE SLUMP AMID SLOWER DEMAND NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on its downward path Wednesday, as the BDI (Baltic Dry Index) kept retreating to new lows. The index was down by 2.12 perce ...
Monday, 30 July 12
DRY BULK MARKET TO REMAIN UNDER PRESSURE FOR THE REST OF 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In an interview with Hellenic Shipping News Worldwide, Mr. Yannis Pachoulis, President of the Hellenic Shipbrokers' Association, remains cautiously ...
Sunday, 29 July 12
FREIGHT MARKET MOMENTUM CONTINUES TO WEAK
COALspot.com - The freight market continued to soft this week with all the segments dropped and the BDI fell below 1,000 points and closed at 933 po ...
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- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- PTC India Limited - India
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
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