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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, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
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- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Central Java Power - Indonesia
- Minerals Council of Australia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
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