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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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Thursday, 13 May 10
CHINA CONCERNS TO TEST RAW MINERALS - THE AUSTRALIAN
The Australian reported that, COMMODITY prices will remain volatile and drop from recent highs as China's appetite for raw materials softens. James ...
Thursday, 13 May 10
ACTIVITY ON WEST COAST INDIA IS SLOWING - FEARNLEYS AS
DRY BULK CHARTERING
Handy
Atlantic markets remain firm but more for end May/beg June dates as there seems to be more enquiries for those dates. ...
Thursday, 13 May 10
DRY BULK SHIP OWNERS CHEERFUL AMID MARKET RALLY
China’s appetite for raw materials like iron ore and coal, as well as a series of added factors are boosting demand for dry bulk carriers, hel ...
Wednesday, 12 May 10
BANPU'S Q1 PROFIT SLIDES 43% TO B2.71BN - BANGKOK POST
The Bangkokpost reported that, Banpu Plc posted a first-quarter net profit of 2.71 billion baht, down by 43% from the same period last year.
The ...
Tuesday, 11 May 10
DALRYMPLE BAY COAL EXPORTS HIGHEST SINCE JULY; NEWCASTLE FALLS - BLOOMBERG
Bloomberg reported that, Coal shipments from Australia’s Dalrymple Bay terminal in Queensland state rose to the highest in nine months in Apri ...
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- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- PTC India Limited - India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- The University of Queensland
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
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