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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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Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
Saturday, 04 February 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 6,000 PER DAY - VISTAAR
COALspot.com - The markets continued to soften which dropped by almost 11 pct and BDI closing at 647 points.
The drop in BDI was mainly due to dr ...
Thursday, 02 February 12
NO RELIEF YET FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although at the start of 2012 nobody can claim that the global seaborne trade has suddenly come to a halt, quite the contrary, it seems that the dry ...
Wednesday, 01 February 12
KRISHNAPATNAM PORT - GOING DEEP TO SOAR HIGH
COALspot.com - Krishnapatnam Port now rightfully claims as the deepest draft port in India, as it has started accepting vessels with maximum permiss ...
Wednesday, 01 February 12
IN JAMBI, MOST MINING COMPANIES LACK 'CLEAR-AND-CLEAN' PERMITS - JP
More than three-quarters of the 386 mining companies in Jambi lack “clear-and-clean” certifications from the government, according to an ...
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- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Australian Coal Association
- White Energy Company Limited
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- ASAPP Information Group - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
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