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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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Tuesday, 13 December 11
CAPESIZES AND PANAMAXES LEAD DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched closer to the 2,000 mark on Monday, with Panamaxes rebounding firmly and leading the gains. As a result, the industry&rsq ...
Monday, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a muc ...
Sunday, 11 December 11
THE PANAMAX INDEX ENDED ON POSITIVE DIRECTION - VISTAAR
COALspot.com - The BDI and Cape index continued the upward trend this week also with BDI up by 3.00 pct closing at 1,922 points and Cape index up by ...
Saturday, 10 December 11
MAHAKAM RIVER RESUMES COAL TRANSPORTATION
COALspot.com - East Kalimantan local government has resumed limited coal barging through Mahakam River after two weeks of suspension following the c ...
Friday, 09 December 11
DRY BULK MARKET REBOUNDS ON HEALTHIER DEMAND OUTLOOK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged forward yesterday, at the highest rate of the past couple of weeks, as a result of stonger iron ore demand, backed by lowe ...
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- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Economic Council, Georgia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Planning Commission, India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
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