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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, 11 May 10
DRY BULK RATES SHOOT UP ON STRONG CARGO DEMAND
The dry bulk industry’s benchmark, the Baltic Dry Index (BDI) has kept its momentum, as predicted by analysts and shipping experts, managing t ...
Saturday, 08 May 10
THE FUTURES FOR THREE YEARS (2010-2012) WAS AT AROUND PANAMAX / $ 21500 & SUPRAMAX / $ 18500 PER DAY - VISTAAR SHIPPING
COALspot.com: The BDI continued to go up and was up by 7.57 pct even though the stock markets was severely affected with worries on Greek debt crisi ...
Saturday, 08 May 10
MAHAGENCO TO IMPORT 3.35 MILLION TON OF COAL
COALspot.com: Indian utility Maharashtra State Power Generation Co. Ltd. is in market for 3.35 million tones of imported coal. The purchase of coal ...
Saturday, 08 May 10
NAPOCOR BUYS 122,000 TONS COAL - ABC CBN NEWS
ABC - CBN News reported that, State-run National Power Corp. (Napocor) said on Thursday it awarded 2 contracts for the supply of a total 122,000 ton ...
Saturday, 08 May 10
RICHARDS BAY COAL SHIPMENTS FALL TO AN 11-MONTH LOW - BLOOMBERG
Bloomberg reported that, Coal shipments from Richards Bay Coal Terminal, Africa’s biggest export facility for the fuel, fell to an 11-month lo ...
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- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
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