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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, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
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- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Planning Commission, India
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- India Bulls Power Limited - India
- Deloitte Consulting - India
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
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