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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, 27 April 10
S.KOREA EWP SEEKS 0.520 MILLION TONS OF SUB-BITUMINOUS COAL
COALspot.com: South Korea East West Power Company has called for term bids for supply of Sub-bituminous Coal for Dangjin Thermal Power Pla ...
Monday, 26 April 10
COAL INDIA NEARS PORT DEAL WITH VIZAG STEEL - DNA
DNA India reported that, Coal India Ltd (CIL), the country’s largest coal producer, is close to signing a deal to acquire space at Vizag Steel ...
Sunday, 25 April 10
THE WAITING AT INDIAN PORTS FOR COAL VESSELS WAS QUITE NORMAL - VISTAAR
COALspot.com: The BDI remained unchanged this week and all other sectors also the change was not much.
The cape index continued to move up and wa ...
Saturday, 24 April 10
NTPC TO BUY COAL MINES IN KAZAKHSTAN - TELEGRAPH INDIA
Telegraph India reported that, NTPC Ltd plans to acquire coal mines and operate two thermal power plants in Kazakhstan.
“We are exploring t ...
Saturday, 24 April 10
CHINA'S COAL IMPORTS DOUBLE IN MARCH
China's General Administration of Customs said that the country imported 15.22 million tons of coal last month, more than double the amount it impo ...
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- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- MS Steel International - UAE
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- The University of Queensland
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- White Energy Company Limited
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
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