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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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Thursday, 26 April 12
BUKIT ASAMS 1Q OPERATING PROFIT MARGIN HAS INCREASED BY 6% TO RP. 1 TRILLION
COALspot.com - PT. Bukit Asam (Persero), the Indonesia’s state owned coal miner's 1Q, 2012 revenue has increased by 31% to Rp. 3.02 trillion ...
Thursday, 26 April 12
TAIPOWER TO BUY 1.15 MILLION TONS OF 5000 GAR COAL
COALspot.com - Taiwan Power Company intends to procure 1.125million tons of sub-bituminous coal for Taipower thermal power plant through open tender ...
Thursday, 26 April 12
TAIPOWER TO BUY 375,000 MT OF 4800 GAR COAL
COALspot.com - Taiwan Power Company intends to procure 375,000 metric tons of low sulfur sub-bituminous coal for Taipower thermal power plant ...
Thursday, 26 April 12
ADK SHIPPED 28,000 TONNES OF COAL THIS MONTH
COALspot.com - Orpheus Energy (ASX:OEG) has announced that four coal barges carrying a total of approximately 28,000 tonnes of ADK (Alam Duta K ...
Thursday, 26 April 12
DRY BULK CARRIERS RENTER FLEET AFTER IDLING, ON MARKETS RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems to be back on track, not only solidifying the gains of the past couple of weeks, but also racing to new heights, recuperra ...
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- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Planning Commission, India
- Parliament of New Zealand
- White Energy Company Limited
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
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