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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, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
Monday, 07 May 12
INDONESIAN HBA FALL AGAIN IN MAY 2012
COALspot.com - Indonesian HBA fall again to lowest level since January 2011 in May 2012. The monthly coal reference price for coal sales in Ma ...
Sunday, 06 May 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA SWAPS SLIGHTLY DROP THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries slightly dropped this week.
According ...
Sunday, 06 May 12
S7 & S8 ROUTES LIKELY TO BE FIRM NEXT WEEK VISTAAR SINGAPORE
COALspot.com - The BDI remained flat this week and was up just by 1 point closing at 1,157 points.
The cape size index was up by 5.14 pct closing ...
Sunday, 06 May 12
EXPORT DUTY ON MINERAL FINALLY TO BECOME EFFECTIVE NEXT WEEK
COALspot.com - Mineral ore exporters of Indonesia ( only IUP holders) are required to obtain recommendation letter from the energy and mineral ...
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- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Chamber of Mines of South Africa
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