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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, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
Tuesday, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several cruci ...
Tuesday, 27 December 11
COAL SHIPMENT OF TIANJIN PORT REACHED 6.72 MLN TONNES IN NOVEMBER - STEEL HOME / HELLENIC SHIPPING
Tianjin port shipped 6.72 million tonnes of coal in November, decreasing 600,000 tonnes versus 7.32 million tonnes in October, while up 21.09% or 1. ...
Tuesday, 27 December 11
NEW CLAUSE PUBLISHED FOR SLOW STEAMING - BIMCO
Many owners and operators faced with high bunker prices are considering implementing slow steaming regimes to save fuel and to assist with capacity ...
Monday, 26 December 11
NEW EXPORT TAX PLAN GREETED WITH PRAISE AND CRITICISM - THE JAKARTA POST
The Jakarta Post, one of the Indonesia's leading english news paper reported that, both praise and criticism showered the government’s plan t ...
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- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Australian Coal Association
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
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