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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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Sunday, 16 May 10
INDIKA ENERGY & COAL ASSETS EXPANSION
Insider stories reported that, PT Indika Energy Tbk (INDY) has three portfolio coal assets, PT Kideco Jaya Agung, coal asset in East Kalimanta ...
Saturday, 15 May 10
THE AVERAGE CHARTER HIRE FOR CAPE REACHES US$ 49,931 PER DAY - VISTAAR SINGAPORE
COALspot.com: "The freight market was extremely buoyant this week with BDI almost up by 9 pct and the market was very firm in Feast/SE Asia sec ...
Saturday, 15 May 10
DRY BULK MARKET POSTS HEALTHY WEEKLY GAINS
The dry bulk market has reached new highs this week, the second consecutive solid one, with the industry’s benchmark, the Baltic Dry Index (BD ...
Friday, 14 May 10
JSW BUYS COAL MINES IN US, PRODUCTION STARTS IN SEPT
JSW Steel on Friday said it has completed $100 million acquisition of coking coal assets in the US and will start production from September to parti ...
Friday, 14 May 10
KANGAROO RESOURCES TO ACQUIRE INDONESIAN COAL PROJECTS - PROACTIVE INVESTORS
Proactive Investors reported that, Kangaroo Resources (ASX: KRL) is preparing to complete the acquisition of its five outstanding Indonesian coal pr ...
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- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- The University of Queensland
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
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