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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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Monday, 19 April 10
PLN TO OPERATE COAL MINES IN BID TO FUEL POWER PLANTS
The Jakarta Globe reported that, state electricity utility PT Perusahaan Listrik Negara said on Sunday that it aimed to take over operation of small ...
Sunday, 18 April 10
GOVT FORMS PANEL FOR RS 12,000-CR (US$ 2.711 BILLION) COAL INDIA IPO - ECONOMIC TIMES
Economic Times reported that, the government has formed an inter-ministerial panel to carry forward the proposed Rs 12,000-crore (US$ 2.711 billion) ...
Sunday, 18 April 10
THE FUTURES FOR THREE YEARS (2010-2012) FOR PANAMAX WAS AT AROUND US$ 21500 PER DAY - VISTAAR
COALspot.com: The BDI indices up by 3.30 pct and overall market continued to be firm except for India to Fareast.
“The cape index for the f ...
Saturday, 17 April 10
DRY BULK MARKET EDGES HIGHER ON STRONGER DEMAND
The dry bulk market managed to inch higher by the end of the week as brokers indicated that stronger cargo demand pushed freight rates that much hig ...
Friday, 16 April 10
KRISHNAPATNAM PORT IS IRONING ITS WAY INTO RECORD BOOKS
COALspot.com: Krishnapatnam Port achieved a new benchmark by loading 60,021 MT of Iron Ore fines in just 24 hrs surpassing its previous record of 54 ...
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- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
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