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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, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
Thursday, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
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- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Planning Commission, India
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
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