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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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Friday, 20 April 12
PANAMAXES LEAD DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A rebound of demand for smaller dry bulk carriers has led the industry’s benchmark, the BDI (Baltic Dry Index) above the 1,000-point mark for ...
Friday, 20 April 12
BUMA HAS PRODUCED 2.6 MILLION TONS OF COAL IN MARCH 2012
COALspot.com - BUMA has removed 28.0 million bcm (+6.4% YoY) of overburden in March 2012 while coal production was at 2.6 million tons (+1.3% YoY).
...
Thursday, 19 April 12
FRESH COAL SALES FROM JATENERGYS JONGKANG MINES
COALspot.com - Energy company Jatenergy Ltd (ASX code JAT) announced today that it had signed a contract for an 11,000 tonne coal sale due for shipm ...
Thursday, 19 April 12
HANDY - 'POSITIVE TREND', PANAMAX - 'A FIRMER TENDENCY', CAPESIZE - 'AGAIN NEGATIVE'
Handy
The positive trend from last week continued, with more cargoes entering the market. Skaw/Passero del fixed tick above USD 4000 for US Gulf di ...
Thursday, 19 April 12
WILLIS MARINE MARKET REVIEW FORECASTS ANOTHER DIFFICULT YEAR - WILLIS GLOBAL MARINE / HELLENIC SHIPPING
After an inauspicious start, 2012 could well be "another difficult and uncertain year for the maritime industry faced with the aftermath of the ...
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- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Australian Coal Association
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
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