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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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Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
Saturday, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
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- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
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