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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, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
Sunday, 19 February 12
THE SPOT FIXTURE RATES WERE REPORTED AT HIGH LEVELS - VISTAAR
COALspot.com - "The markets seems to holding back this week appears the momentum which picked up last week may slow down" - Capt. Reddy of ...
Sunday, 19 February 12
INDIKA ACQUIRES MULTI TAMBANGJAYA - INSIDER STORIES
Insider Stories reported that, PT Indika Energy Tbk (INDY) announced that wholly-owned subsidiaries have signed a conditional sale and purchase agre ...
Friday, 17 February 12
COLOMBIA COAL PRODUCTION, EXPORTS JUMP IN 2011: GOVT - COLOMBIA REPORTS
Colombia Reports reported that, colombia's coal production jumped 15.4% in 2011 to 85.8 million tonnes versus the previous year while exports rose ...
Thursday, 16 February 12
GEARING UP FOR THE EMERGING OIL & GAS OPPORTUNITIES IN MYANMAR
Press Release - Myanmar Ministry of Energy and Centre for Management Technology (CMT) to Co-host MOGP (Myanmar Oil, Gas & Power) Summit on 28 - ...
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- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- The University of Queensland
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
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