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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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Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
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- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Planning Commission, India
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
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