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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, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
Wednesday, 07 March 12
3RD MOZAMBIQUE COAL CONFERENCE
3rd Mozambique Coal Conference
2-4 July 2012 | Joaquim Chissano International Conference Centre , Maputo, Mozambique
http://www.immevents.com/mo ...
Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk c ...
Wednesday, 07 March 12
BUKIT ASAM EYES 39% RISE IN COAL SALES - INSIDER STORIES
Insider Stories reported that, PT Bukit Asam Tbk is scouting a 39% increase in coal sales volume to 18.66 million tons this year from last year with ...
Wednesday, 07 March 12
PETROSEA SEALS US$188 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, coal mining contractor PT Petrosea Tbk has secured a US$188 million additional contract from its affiliated firm PT S ...
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- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Romanian Commodities Exchange
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