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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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Saturday, 07 July 12
EXCESS SUPPLY & WEAK DEMAND KEEP COAL PRICES LOW
COALspot.com - SGX AsiaClear OTC Coal Swaps for August and Q4 deliveries slipped slightly this week. SGX’s Indonesian sub-bituminous coal swap ...
Saturday, 07 July 12
BALTIC INDEX UP ON STRONG CAPE, PANAMAX RATES - VISTAAR
COALspot.com - This week all the segments were firmed up with BDI up by 15.23 pct (up by 153 points) closing at 1,157 points.
The cape index also ...
Saturday, 07 July 12
DRY BULK MARKET NOT ABLE TO FIND SOLID GROUND SAY EXPERTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the second half of each, traditionally looking the most active one, especially in terms of newbuildings being delivered, it's highly unlikely ...
Thursday, 05 July 12
GOVT GETS READY FOR $1.8B SUIT - THE JAKARTA POST
The Jakarta Post, one of the leading Indonesian English new papers reported that, several ministries and the Attorney General’s Office held a ...
Thursday, 05 July 12
DRY BULK MARKET MOVES FURTHER UP THE HILL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its growth momentum by the middle of the week, as the BDI (Baltic Dry Index) rose by an additional 40 points to 1,103 p ...
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- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
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- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
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- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
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- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
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- SMG Consultants - Indonesia
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- Indian Energy Exchange, India
- Australian Coal Association
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- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
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- Power Finance Corporation Ltd., India
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- CNBM International Corporation - China
- Parliament of New Zealand
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- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
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- Edison Trading Spa - Italy
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- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
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- The Treasury - Australian Government
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
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