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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, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
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- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
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