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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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Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
Wednesday, 16 November 11
A STRONG WEEK FOR THE CAPES - BRS
A sharp bounce by the Cape market pushed the BDI up by 3% last week. This was despite a softening in the other indices with the Panamax, Supramax an ...
Monday, 14 November 11
BORL SEEKS 660K MT OF LOW SULPHUR COAL
COALspot.com - BORL India has issued a tender for around 660,000 MT of 4500 - 5500 kcal/kg sub-bituminous Coal.
Bharat Oman Refineries Ltd ...
Sunday, 13 November 11
BUNKER PRICES REMAINED FIRM
COALspot.com - The market seemed to recover this week with the BDI and Cape Index up.
The BDI was up by only about 2.86 pct closing at 1835 point ...
Saturday, 12 November 11
COALINDO ENERGY LAUNCHED INDEX FOR 3400 GAR COAL
COALspot.com - PT Coalindo Energy, in cooperation with Argus Media Limited, launched the coal index for low-rank coal with a calorific value of 3,40 ...
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- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- White Energy Company Limited
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
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