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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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Wednesday, 21 April 10
INDONESIA SHIPPED 13.24 PERCENT MORE COAL IN MARCH THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 27,615,191 MT of coal in March 2010, compare to 24.38 million tons in January and ...
Tuesday, 20 April 10
INDO HARUM ENERGY WINS US$200MN LOAN PLEDGE FROM BANK SYNDICATE
Indonesian coal producer PT Harum Energy has secured a loan commitment of US$200 million from a syndicate of six banks.
Bank of Tokyo Mitsubishi ...
Tuesday, 20 April 10
PACIFIC SUPRA MARKET WAS STILL SOFTENING - BRS
A modest increase in dry bulk rates this week with activity picking up in the middle of the week. Panamax rates remain above the Capes, and there wa ...
Monday, 19 April 10
IS CHINA TO SUFFER NEW COAL SUPPLY SHORTAGE IN 2010? - XINHUA
Is China likely to suffer a new coal supply shortage in 2010? It's a question haunting many Chinese market analysts now. After a string of several ...
Monday, 19 April 10
WHITE ENERGY BUYS SA COAL - ABC NET
ABC Net reported that, South Australian Coal Limited is being bought by the New South Wales company White Energy.
Shareholders will get a combine ...
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- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Parliament of New Zealand
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Planning Commission, India
- Videocon Industries ltd - India
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
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