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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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Wednesday, 06 June 12
INDONESIAN GOVERNMENT'S DECLARED COAL PRICES CONTINUING ITS DECLINE
COALspot.com - Indonesian HBA fell to lowest level since January 2011 in June 2012. The monthly coal reference price for coal sales this month ...
Monday, 04 June 12
MITRABAHTERA SUBSIDIARY SECURES CONTRACT FROM BERAU COAL - INSIDER STORIES
Insider Stories reported that, PT Mitra Alam Segara Sejati, a subsidiary that is 60% owned by PT Mitrabahtera Segara Sejati Tbk (MBSS), has secur ...
Sunday, 03 June 12
TTI ESTABLISHES COAL TRADING & MARKETING OFFICE
COALspot.com - TTI has officially established its coal trading, marketing-office in Jakarta, Indonesia. PT. Gunung Tinggi Coal is the TTI’s fi ...
Sunday, 03 June 12
FREIGHT MARKET CONTINUING ITS DECLINE
COALspot.com - The BDI continued to fall for the fifth straight week and the BDI fell by 2.57 pct this week closing at 904 points.
The Cape Size ...
Friday, 01 June 12
TNPL HAS SECURED 300K MT OF 6000 GAD COAL AT US$ 81 CNF TUTICORIN
COALspot.com - An India based coal trader Adani has offered the lowest price of US$ 81.00 per metric ton for calorific value of 6000 GAD and 15 perc ...
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- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
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