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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, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
Monday, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
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- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Indian Energy Exchange, India
- ASAPP Information Group - India
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