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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, 05 April 10
RI TO SET REFERENCE FOR COMMODITIES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia is set to help establish global reference prices for mining and agricultural commodities, with the establi ...
Monday, 05 April 10
MARCO POLO MARINE SECURES US$20 MILLION 4-YEAR COAL TRANSSHIPMENT CONTRACT
COALspot.com: Accordign to Mraco Polo Marine website, Singapore Exchange Mainboard-listed Marco Polo Marine Ltd, a growing integrated marine logisti ...
Saturday, 03 April 10
SHIPS OPENING FAREAST CONTINUE TO BE STRUGGLING FOR CARGOES - VISTAAR
COALspot.com: The dry bulk freight market continues to be under pressure and all the indices were down this week except for Cape size index which wa ...
Friday, 02 April 10
XSTRATA RAISES BENCHMARK COAL PRICE AS MUCH AS 40% - BLOOMBERG
Bloomberg reported that, Xstrata Plc, the world’s largest exporter of coal used for power, raised benchmark prices for the fuel to an unidenti ...
Thursday, 01 April 10
OWNERS WERE STILL BULLISH ON SHORT PERIOD NUMBERS, BUT CHARTERERS IN GENERAL WERE NOT READY TO PAY - BRS
SUPRA / HANDY
After several weeks of a rising market, the BSI lost 9% last week to close on Friday at US$ 27,677 per day for the TC routes. ...
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- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Goldman Sachs - Singapore
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- The University of Queensland
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Planning Commission, India
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
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