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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, 16 April 10
RBCT COAL DISPUTE RESOLVED - MININGMX
Miningmx reported that, the long-simmering spat over the coal allocation for producers who will use the expanded facilities at Richards Bay Coal Ter ...
Friday, 16 April 10
COAL INDIA SELECTS MERCHANT BANKERS TO ACQUIRE OVERSEAS ASSETS -THE HINDU
An investment of about $1.8 billion is expected to be made in these deals
The Hindu reported that, Bank of America-Merill Lynch, Royal Bank of Sc ...
Thursday, 15 April 10
MAJOR THERMAL COAL CONTRACT AT 40% HIGHER PRICE THAN LAST YEAR - BUSINESS STANDARD
Business-Standard reported that, India is expected to import nearly 60 million tonnes of thermal coal this year.
After coking coal and iron ...
Thursday, 15 April 10
RICHARDS BAY ROUNDS BACK TO INDIA SUPRAS WERE FIXED AT MID 20'S
Handy
The BSI remains in a positive momentum and the Atlantic remains unchanged from last week. Fronthaul grain is active which is keeping ballast ...
Thursday, 15 April 10
DRY BULK MARKET SLOWLY GAINING GROUND
The troubled and underperforming capesize sector of the dry bulk market has been experiencing an improved sentiment since Tuesday, a trend verified ...
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- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Planning Commission, India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
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