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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, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
Saturday, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
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- Wilmar Investment Holdings
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Minerals Council of Australia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Videocon Industries ltd - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
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