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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, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
Monday, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the minera ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
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- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Australian Coal Association
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- The University of Queensland
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