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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, 22 March 12
ECI-CHINA HANDY RATES ARE AROUND US$ 8000 - FEARNLEYS
Handy
Another positive trend was seen last week with more cargoes entering the market. Skaw-Passero/US Gulf climbed slowly up to USD 3700, while US ...
Thursday, 22 March 12
DRY BULK MARKET KEEPS SURGING, CAPESIZES FALLING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what seems to be an establishing pattern, the dry bulk market has kept its upward momentum, edging closer to the 900 point-mark, but the larger s ...
Wednesday, 21 March 12
BUMA HAS PRODUCED 2.3 MILLION TONS OF COAL IN FEBRUARY 2012
COALspot.com - PT. Delta Dunia Makmur's overburden removal in February 2012 has reached totaled 23.8 million bcm (+2.4% YoY) while coal production ...
Tuesday, 20 March 12
SMALLER DRY BULK VESSELS STILL LEADING DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been growing during the past couple of weeks, but contrary to the usual practice, it’s not the larger Capesizes which ...
Monday, 19 March 12
WEEKLY DRY MARKET OVERVIEW: SMALLER VESSELS LEAD RATES HIGHER - MARIA BERTZELETOU, HELLENIC SHIPPING
The upward trend of the Baltic Dry Index persists strong from the end of February, spurred from the supramax market that offsets the weakness in the ...
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- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- MS Steel International - UAE
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
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