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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, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, des ...
Tuesday, 03 July 12
DRY BULK MARKET INCHED FORWARD AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward at the beginning of the new week, prior to the US holidays regarding the celebration of the 4th of July, which is ...
Monday, 02 July 12
ORPHEUS STRENGTHENS REVENUE STREAM WITH NEW ROYALTY AGREEMENT AT THE B2 COAL PROJECT
Orpheus Energy (ASX:OEG) is pleased to advise that it has executed a life of mine Royalty Agreement with Indonesian mining contractor PT Debbia Mini ...
Monday, 02 July 12
DRY BULK DEMAND TO RISE TO 3.6 BILLION TONNES IN 2012, BUT NEW BUILDING DELIVERIES ARE
In its latest analysis on the dry bulk market fundamentals, DVB Bank said that dry bulk cargo demand is forecast to rise to approximately 3.6 billio ...
Sunday, 01 July 12
AUSTRALIAS CARBON TAX - SUNIL K KUMBHAT
COALspot.com - Climate Change
Climate change and global warming have now become buzzwords the world over. The disastrous consequences for global ...
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- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Wilmar Investment Holdings
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Economic Council, Georgia
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