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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, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
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- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
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