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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, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
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- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- The University of Queensland
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
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