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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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Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
Wednesday, 11 July 12
HBA DROPPED SHARPLY IN JULY
COALspot.com - Indonesian HBA fell to lowest level since September 2010 in July 2012. The monthly coal reference price for coal sales this mon ...
Wednesday, 11 July 12
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 1.26 PER TON
COALspot.com - Sub-Bit FOB Indonesia Coal decline for a second day yesterday, according to SGX AsiaClear OTC Coal Swaps. The prices for shipments to ...
Tuesday, 10 July 12
DRY BULK MARKET RECORDS MODEST GAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher on Monday, with the Baltic Dry Index (BDI) ending the session up by 5 points to 1,162. Most markets were hig ...
Saturday, 07 July 12
INDONESIA-JAPAN RELATIONS TURN SOUR - THE JAKARTA POST
The Jakarta Post, the one of the leading Indonesian English new papers reported that, Bilateral relations between Indonesia and Japan have recently ...
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- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- The University of Queensland
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
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