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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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Monday, 17 May 10
INDONESIA SHIPPED 15.51 PERCENT LESS COAL IN APRIL THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23,331,542 MT of coal in April 2010, compare to 27.61 million tons in ...
Monday, 17 May 10
S. AFRICA CUTS EUROPE COAL SUPPLY, ASIA SALES RISE, TRADER SAYS - BLOOMBERG
Bloomberg reported that, South Africa’s Richards Bay Coal Terminal, Europe’s biggest source of the fuel burned for power, cut shipments ...
Monday, 17 May 10
GREEK CRISIS TO SEE FREIGHT RATES FALL BANGKOK POST
The Greek debt crisis will likely cause shipping rates to fall this quarter enabling SET-listed Precious Shipping Plc to buy second-hand vessels at ...
Monday, 17 May 10
NEWCASTLE COAL QUEUES COULD BE HISTORY - THE HERALD
NEWCASTLE'S infamous coal queues could be a thing of the past if a plan to have the ships anchor over the horizon succeeds against the doubts of it ...
Sunday, 16 May 10
THREE FIRMS SHORTLISTED FOR CIL'S $ 2BN OVERSEAS PROJECTS - ECONOMIC TIMES
Economic Times reported that, State-owned Coal India Ltd (CIL) has shortlisted US firms Massey Energy and Peabody Energy, besides Indonesian Novem/S ...
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- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Marubeni Corporation - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
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