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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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Monday, 12 March 12
DELTA DUNIA 1M OVERBURDEN DROPS 3.1% - INSIDER STORIES
Insider Stories reported that, Indonesia's second largest coal mining contractor PT Delta Dunia Makmur Tbk (DOID) reported a 25 million bank ...
Monday, 12 March 12
DRY BULK RATES WILL REMAIN LOW IN 2012 SAYS DANISH SHIP FINANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its annual shipping survey Danish Ship Finance said that the current outlook for the Dry Bulk market seems unlikely to foster higher rates in any ...
Monday, 12 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first days of March appear to be more encouraging for dry bulk operators, but the outlook is still gloomy for the rest of year with earnings for ...
Sunday, 11 March 12
FREIGHT RATES FOR INDONESIA TO INDIA WILL CONTINUE TO REMAIN FIRM- VISTAAR
COALspot.com - This week saw another upward trend with all indices up except for the Cape index.
The BDI was up by 6.87 pct closing at 824 points ...
Friday, 09 March 12
MINING IN INDONESIA: RESTRICTION ON FOREIGN INVESTMENT - SUNIL K KUMBHAT
COALspot.com - Recently Govt has passed regulation instructing foreign mining companies to reduce their ownership stake.
The regulation known as ...
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- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- The University of Queensland
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- White Energy Company Limited
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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