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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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Friday, 22 June 12
GLOBAL ACTION NEEDED ON ENERGY POVERTY - WORLD COAL
Eradicating energy poverty is possibly the biggest challenge facing the world today. Like climate change it can only be addressed with a concerted g ...
Friday, 22 June 12
COAL: THE BACKBONE OF MODERN ELECTRICITY - ECOAL
Coal has been described as the "forgotten fuel," perhaps because many aren't aware of the huge role it plays in powering the global econo ...
Thursday, 21 June 12
DRY BULK MARKET ON THE RISE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was on the rise once again yesterday, with the Baltic Dry Index (BDI), the industry’s benchmark, rising by 18 points, or 1 ...
Wednesday, 20 June 12
BDI MOVING HIGHER, PANAMAX AND SUPRAMAX VESSELS STRONGER, CAPESIZE RATES NEAR TO HISTORICAL LOWS OF DECEMBER 2008 - MARIA BERTZELETOU, HELLENIC SHIPPING
The dry market seems to follow the dynamic of the previous week with the Baltic Dry Index showing daily increases since June 8th, but is still stand ...
Tuesday, 19 June 12
SMALLER DRY BULK CARRIERS LIFT UP MARKET, PANAMAXES SET TO FALL SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Another rise for the dry bulk market was evident yesterday, as the industry’s benchmark, the BDI (Baltic Dry Index) was up for a ninth straigh ...
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- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- The University of Queensland
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Planning Commission, India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
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