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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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Thursday, 19 January 12
SOUTHGOBI RESOURCES SELLS MORE THAN FOUR MILLION TONNES OF COAL IN 2011, 58% MORE THAN 2010
COALspot.com - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) has successfully complets year 2011 on guidance in terms of coal sales and production.
...
Thursday, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
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- Wilmar Investment Holdings
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
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- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- White Energy Company Limited
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
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