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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, 01 May 12
VIETNAM FEARS IT MAY NOT SEEK COAL SUPPLIES - TBKTSG / VIETNAMNET BRIDGE
TBKTSG / VietNamNet Bridge reported that, with five coal-run thermopower plants under construction, PetroVietnam alone would need 18 million tons of ...
Sunday, 29 April 12
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The BDI continued to go up with the support of Panamax/Supramax and was up by 8.34 pct closing at 1,156 points.
The cape index was ...
Sunday, 29 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS FOR MAY 2012 DELIVERY WAS STABLE THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps for May deliveries stable this week, according to DSP of SGX AsiaClear OTC Coal Swaps. In the me ...
Friday, 27 April 12
BUKIT ASAMS NET INCOME UP 14% IN 1Q 2012 (UNAUDITED)
Press Release - PT Bukit Asam (Persero) Tbk, announced the Consolidated Financial Statements and Subsidiaries per 31 March 2012 (Unaudited).
Reve ...
Thursday, 26 April 12
AUSTRALIAS COKAL EXPANDS MET COAL POTENTIAL INTO WEST KALIMANTAN
COALspot.com - Global metallurgical coal group Cokal Limited (Cokal) (ASX:CKA) announced today it has completed the acquisition of 75.2% of PT Silan ...
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- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
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