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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, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
Tuesday, 10 January 12
THE 4TH DEEPWATER ASIA CONGRESS 2012 WILL KICK OFF ON MAY 23 - 25
Press release - Based on the past three years’ success, SZ & W Group is excited to announce the 4th Deepwater Asia Congress will be held o ...
Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of s ...
Sunday, 08 January 12
ICICI OUTLOOK ON INDIAN POWER, MINING,CEMENT, AND SHIPPING SECTORS PERFORMANCE IN 2012
Broking firm, ICICIdirect (India) has come out with report on sectors outlook for 2012. IRIS has collated key highlights for each sector from ...
Sunday, 08 January 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7000 PER DAY - VISTAAR
Wish You a Very Happy and Prosperous New year 2012.
COALspot.com - The last report by us was on 16th Dec 2011 and because of holidays this would ...
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- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- White Energy Company Limited
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Baramulti Group, Indonesia
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
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