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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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Wednesday, 11 April 12
TWO PERCENT OF IBP CONCESSION CONTAINS 42 MMT OF COAL
COALspot.com - 42.35 million ton of coal found in just 2% of PT Insani Bara Perkasa’s total concession area of 24,477 hectare.
Accord ...
Wednesday, 11 April 12
DRY BULK MARKET STILL SUBDUED, RECOVERY NOT YET SEEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market entered the new week after the past days of easter holidays in western countries in a subdued mood. The industry’s benchma ...
Monday, 09 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first week of April ended with the Baltic Dry Index falling below 950 points, before Catholic Easter, and capesizes showing a modest upturn with ...
Sunday, 08 April 12
CHARTER RATES COULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI was almost at same levels closing slightly lower by 0.64 pct at 928 points.
The Cape index was up by 6.73 pct closing at ...
Friday, 06 April 12
INDONESIAN HBA FALL TO LOWEST LEVEL SINCE JANUARY 2011
COALspot.com - Indonesian HBA fall to lowest level since January 2011 this month. The monthly coal reference price for coal sales in April fal ...
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- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
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