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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, 29 April 10
SOUTH AFRICAN ROUNDS BACK TO INDIA SUPRAS CAN ACHIEVE AROUND MID 20S
Handy
Atlantic markets remain firm. Supramaxes open in USG are now achieving low/mid&n ...
Thursday, 29 April 10
KANGAROO RESOURCES INKS KEY COAL EXPORT CONTRACT WITH YUDEAN FARNON - PROACTIVE INVESTORS
Proactive Investors reprted that, Kangaroo Resources has secured an initial export sales contract for coal from the company’s operating coal p ...
Wednesday, 28 April 10
UNITED TRACTORS FOCUSES ON MINING AS IT SEEKS TO DIVERSIFY REVENUE SOURCES - JG
The Jakarta globe reported that, PT United Tractors, Indonesia’s biggest heavy-equipment distributor and mining contractor, aims to have its m ...
Wednesday, 28 April 10
DRY BULK MARKET
After a prolonged period of anticipation and a stalled dry bulk market in terms of freight rates, the industry’s benchmark, the Baltic Dry Ind ...
Tuesday, 27 April 10
CAPESIZES UP, PANAMAXES DOWN - BRS
It was Capesizes up, Panamaxes down this week as the latter experienced a correction after its recent gains. Period rates for Panamaxes remain firm ...
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- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- The University of Queensland
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
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