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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, 05 December 11
THE DECEMBER HBA FELL 11% FROM ITS PEAK AT US$127.05 PER TON IN FEBRUARY 2011
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the December 2011 coal reference price at US$ 112.67 per ton US$ 3.98 ...
Monday, 05 December 11
SGX LAUNCHED IHS MCCLOSKEY/XINHUA INFOLINK OTC CFR SOUTH CHINA COAL CONTRACT TODAY
COALspot.com - In order to meet the demand of the coal industry for an effective coal hedging tool with counterparty credit risk mitigation facility ...
Monday, 05 December 11
DRY BULK RATES LOOKING TO EXTEND GAINS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize dry bulk carrier owners have had a great week, with rates rising for six straight sessions (including the end of the week before that). As ...
Sunday, 04 December 11
SUPRAMAX TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7500 - 8000 PD
COALspot.com - The BDI and Cape index recovered this week. The BDI was up by 3.26 pct and Cape index saw a big jump and closed at 3409 points (up by ...
Saturday, 03 December 11
BORNEO TO SPEND US$600 MIO CAPEX - INSIDER STORIES
Insider Stories reported that, Coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN) plans to spend US$600 million capital expenditure ( ...
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- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- VISA Power Limited - India
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Australian Coal Association
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
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