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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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Sunday, 01 July 12
DSP OF SGX ASIACLEAR OTC COAL SWAP'S THIS WEEKS MOVEMENTS SLIGHTLY POSITIVE
COALspot.com - SGX AsiaClear OTC Coal Swaps have recovered slightly this week and Q4 deliveries are also showing positive direction.
SGX’s ...
Saturday, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
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- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
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