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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, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
Tuesday, 22 November 11
ABM INVESTAMA SETS IPO AT RP 3,750
Insider Stories reported that, Integrated energy company PT ABM Investama Tbk has determined the IPO price at Rp3,750 (approximately US$ 0.415) per ...
Tuesday, 22 November 11
A SURPRISINGLY STRONG WEEK FOR THE CAPES - BRS
Positive gains for most of the segments this week, the exception being the Handysizes. Overall the BDI ended the week at 1,895 points (+3.3% week-on ...
Tuesday, 22 November 11
APPETITE FOR DRY BULK VESSELS SLOWS DOWN AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was down at the beginning of the week, as demand for Capesize vessels was particularly low. The industry’s benchmark, the ...
Monday, 21 November 11
CAPESIZES DRIVE MARKET LOWER, ANALYSTS DIVIDED ON DRY BULK OUTLOOK IN THE LONG RUN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market ended the week on a sour note, with the industry’s benchmark heading downwards to 1,895 points, which represented a slight ...
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- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
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