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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
PANAMAXES AGAIN EARN MORE THAN CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of demand for Panamaxes has led the dry bulk market to new higher ground on Monday, with the Baltic Dry Index (BDI) reaching 1,090 ...
Wednesday, 25 April 12
CHINA IMPORTS 9.76 MMT AND INDIA IMPORTS 7.03 MMT OF INDONESIAN COAL LAST MONTH
COALspot.com: Indonesia, the world largest coal exporter, shipped 30.64* million tons of coal in March 2012, compared to 27.12* million tons i ...
Monday, 23 April 12
ALTURA ENTERS INTO AGREEMENT TO ACQUIRE 2 COAL PROJECTS IN SOUTH KALIMANTAN
COALspot.com - Altura Mining Limited (ASX: AJM) has announced that it has entered into an agreement to acquire a further two (2) Mining Permits (IUP ...
Sunday, 22 April 12
THE FREIGHT MARKET EXPECTED TO REMAIN FIRM NEXT WEEK - VISTAAR
COALspot.com - The BDI has broken the psychological barrier of 1000 points and closed at 1067 points.
The cape index was slightly down by 2.48 pc ...
Saturday, 21 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP 2.61 PERCENT THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps fell for a fifth day, according to DSP of SGX AsiaClear OTC Coal Swaps.
CFR South China Coal ...
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- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Parliament of New Zealand
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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