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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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Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
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- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Australian Coal Association
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Planning Commission, India
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- White Energy Company Limited
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