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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, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Australian Coal Association
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- The University of Queensland
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
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