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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, 08 June 12
MINISTER DENIES COAL EXPORT TAX PLAN, ENDORSES RESTRICTIONS - THE JAKARTA POST
The Jakarta post, one of the leading english news paper in Indonesia reported that, Energy and Mineral Resources Minister Jero Wacik has denied that ...
Friday, 08 June 12
NO IMMEDIATE IMPACT ON ADARO'S RATING FROM BEP TRANSACTION - FITCH RATINGS
Fitch Ratings has said that PT Adaro Indonesia's (Adaro, 'BB+'/ Stable) ratings are not immediately affected by its parent PT Adaro Energy Tbk's ...
Thursday, 07 June 12
DRY BULK MARKET FALLS FOR 10 STRAIGHT SESSION ON OVERSUPPLY PROBLEMS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A resurgence of oversupply, coupled with national holidays in various parts of the world has contributed to yet another fall of the dry bulk market ...
Thursday, 07 June 12
COAL EXPORT TAX NOT RATIONAL: MINISTER - THE JAKARTA POST
Trade Minister Gita Wirjawan has criticized as irrational the idea to restrict coal exports by imposing an export tax, According to The Jakarta post ...
Thursday, 07 June 12
BY 2022 PLN IS EXPECTED TO BURN AROUND 125 MILLION TONS OF COAL
COALspot.com - Indonesia's state owned electricity company's (PLN) coal consumption is expected to reach 125.7 million tons by 2012.
Nur Pamudj ...
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- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Minerals Council of Australia
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Parliament of New Zealand
- PTC India Limited - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
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