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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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Sunday, 20 November 11
THE FREIGHT MARKETS EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The market continued to move up with all sectors gaining except for handy size.
The BDI was up by 3.26 pct and closed at 1895 poin ...
Friday, 18 November 11
MMTC SEEKS 1.365 MMT OF IMPORTED COAL
COALspot.com - India's MMTC, the largest trading company of India and a major trading company of Asia, has issued a term supply tender for 1.365Mt ...
Friday, 18 November 11
KPC, ARUTMIN OUTPUT REACHED 47.1 MIO TONS - INSIDER STORIES
PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, reported 47.1 million tons of coal production in 9M 2011, according to Indiser Stories.
Insi ...
Friday, 18 November 11
THE ATLANTIC SUPRAMAX MARKET EXPERIENCED A STEADY AND FIRM TENDENCY
Handy
The Atlantic Supramax market experienced a steady and firm tendency this week. Especially the North Atlantic and Mediterranean position ...
Friday, 18 November 11
BERAU COAL 9M PROFIT SOARS 194.46% - INSIDER STORIES
Insider Stories reported that, PT Berau Coal Energy Tbk (BRAU), which is 84.7% owned by Bumi Plc, reported a 194.46% jump in net profit by end of Se ...
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- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
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