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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, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
Thursday, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
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- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- PTC India Limited - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Minerals Council of Australia
- The University of Queensland
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
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