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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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Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
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