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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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Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
Monday, 11 June 12
BAHANA FORECASTS THE COAL PRICES WILL FALL FURTHER
COALspot.com - Growing US coal supplies + low shipping costs = Asia as target.
According to Irwan Budiarto analyst at Bahana Securities, US ...
Monday, 11 June 12
ASIAN COAL TRADING COMMUNITY EMBRACES API 5 AND API 8
Press Release - The Asian coal trading community is embracing the API 5 and API 8 indexes for its swap contracts.
The API 5 index represents 5,50 ...
Sunday, 10 June 12
FREIGHT MARKET EXPECTED TO REMAIN WEAK FOR NEXT FEW WEEKS - VISTAAR
COALspot.com - The BDI continued to fall this week and down by 2.99 pct closing at 877 points.
The Cape index also was down by 5.78 pct closing a ...
Friday, 08 June 12
ESSAR ENERGY RECEIVES FINAL APPROVAL FOR INDONESIAN COAL BLOCK
COALspot.com - Essar Energy plc, the India-focused integrated energy company, today announced that it has received final ‘Pinjam Pakai’ ...
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- SMG Consultants - Indonesia
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- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Wilmar Investment Holdings
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- Jaiprakash Power Ventures ltd
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- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
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- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
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- Energy Link Ltd, New Zealand
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- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
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- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
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- Therma Luzon, Inc, Philippines
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- Anglo American - United Kingdom
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- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
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- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
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- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
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- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
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- GN Power Mariveles Coal Plant, Philippines
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- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Independent Power Producers Association of India
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- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- The University of Queensland
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Tamil Nadu electricity Board
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- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
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- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
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