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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, 22 May 10
INDUSTRY QUESTIONS STEAM COAL PRICE ANOMALY
Five South Korean utilities have secured a deal for 3.13 million tonnes of Australian thermal coal with a calorific value of 6,080kcal/kg for delive ...
Wednesday, 19 May 10
DRY BULK FREIGHT RATES' RALLY MAY BE SET TO END
The Baltic Dry Index (BDI) has rallied these past couple of weeks, almost touching the 4,000 point mark. But this positive development for dry bulk ...
Wednesday, 19 May 10
NEWCASTLE WEEKLY EXPORTS RISE; SHIP QUEUE LENGTHENS
Coal shipments from Australia's Newcastle port, the world's biggest export harbor for the fuel used in power stations, rose 2.9 percent last week ...
Tuesday, 18 May 10
THE BDI HIT A FIVE-MONTH HIGH AT THE CLOSE OF LAST WEEK
According to BRS, One of the oldest ship broker, at 3,929 points, the BDI hit a five-month high at the close of last week. The Capesize four time ch ...
Tuesday, 18 May 10
COAL TRADER CHINA QINFA TO BUY TWO BULK CARRIERS FOR 69 MLN USD
China Qinfa Group, a leading non-State-owned coal trader on China's mainland, said Sunday it had signed shipbuilding contracts to pay 69 million U. ...
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- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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