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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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Friday, 23 April 10
KPCL EYES MINE IN INDONESIA - BUSINESS STANDARD
Business-Standard reported that, Karnataka Power Corporation Ltd (KPCL), the state-owned power generator, is exploring the possibility of acquiring ...
Thursday, 22 April 10
INDONESIAN COAL PRICE REFERENCE FOR MARCH 2010 - US$ 86.64/T
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has begun publishing a monthly coal price reference (HBA) to be use ...
Thursday, 22 April 10
NEED TO IMPORT 82 MT COAL IN FISCAL - INDIA COAL MIN
Indian Express reported that, anxious to bridge the ever-widening gap between the rising demand for coal and its inadequate supply, the Coal Ministr ...
Thursday, 22 April 10
DRY CARGO DEMAND EXPECTED TO INCREASE, FAVORING HIGHER FREIGHT RATES
Increased dry bulk cargo demand is expected to become the norm in the coming weeks and months, according to analysts, which in turn should sustain f ...
Thursday, 22 April 10
INDIA'S BORL SEEKS TO BUY INDONESIAS LOW - SULFUR COAL
COALspot.com: Bharat Oman Refineries Ltd, a joint venture company (promoted by Bharat Petroleum Corporation Ltd, India and Oman Oil Company Lt ...
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- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- The University of Queensland
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
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