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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, 12 November 11
BBJ WILL RELEASE A COAL CONTRACT
Jakarta Futures Exchange will soon release a coal futures contracts during the quarter 1 / 2012.
Director of the Jakarta Futures Exchange (BBJ) S ...
Saturday, 12 November 11
DRY BULK MARKET REGAINS SOME OF THE LOST GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market managed to edge forward yesterday, putting an end and halting the losses accumulated over the course of the past weeks, which ha ...
Friday, 11 November 11
PETROCOM ENERGY PLANS $40M TO BUILD COAL PLANT IN CILEGON - JP
The Jakarta Post reported that, Hong Kong-based Petrocom Energy Ltd has unveiled plans to invest up to US$40 million on a proposed coal-blending fac ...
Friday, 11 November 11
GOVT WAITS LEGAL DECISION ON BUKIT ASAM, ADARO DISPUTE - JP
The Jakarta Post reported that, The government says that it will not interfere in the settlement process of the dispute between state coal miner PT ...
Thursday, 10 November 11
INDONESIAN REFERENCE COAL PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the November 2011 Indonesian Coal Reference Price for thermal coal at U ...
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- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Minerals Council of Australia
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
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