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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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Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
Thursday, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
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- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- PTC India Limited - India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- The University of Queensland
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
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