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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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Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
Thursday, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
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- Independent Power Producers Association of India
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Australian Coal Association
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
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