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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, 01 February 12
2% OF IBPS TOTAL CONCESSION AREA CONTAINS TOTAL COAL RESOURCE OF 56.1 MILLION TON
COALspot.com - PT. Britmindo, a mine consulting firm, has finalized PT. Insani Bara Perkasa (IBP) first JORC (Joint Ore Reserves Committee) res ...
Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
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- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Australian Coal Association
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
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