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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, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
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- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Minerals Council of Australia
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
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