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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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Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
Saturday, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
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- London Commodity Brokers - England
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- The University of Queensland
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
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