CMT orders 2 Capes at $129m

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Courtesy of Tradewinds,,, Published: 08:35 GMT, 14 Apr 10 | updated: 08:43 GMT, 14 Apr 10

CMT orders 2 Capes at $129m

Chinese Maritime Transport of Taiwan has signed up for a brace of large bulkers at a compatriot yard in a deal which again makes Diana Shipping’s recent order look cheap.

The Taipei-based owner is getting a pair of 203,000-dwt ships for its $129m outlay at CSBC, TradeWinds has learned.


Although a letter of agreement was only announced as signed on Wednesday the order is expected to be firmed up by the end of May.

Delivery is pencilled in for the first or second quarters of 2012 with firmer delivery dates expected to be hatched when the order is confirmed.

CMT has not pencilled in any options at the Kaohsiung-based shipbuilder and currently has no other ships on order at the yard. It is not the owner’s first foray to CSBC but it has not placed an order with its compatriot in many years.

At $64.5m a piece CMT’s orders are more expensive than the pair of 206,000-dwt units Greek owner Diana announced on Tuesday it is building in China. Each of the so-called newcastlemaxes on order at Shanghai Jiangnan-Changxing Shipbuilding is costing NYSE-listed Diana $59m with delivery in the second and third quarters of 2012.

These ships were themselves markedly cheaper than the same-sized trio Greek owner OceanFreight ordered at Shanghai Waigaoqiao Shipyard at the end of March. The Anthony Kandylidis-led owner is spending $68m a piece on the ships, which it termed VLOCs, with delivery also in the second and third quarters of 2012.
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[Iain B]

I had lunch with a ship owner yesterday who has some bulk ships and he told me that the price of delivered ore in China is currently about $200 a tonne. This is similar to the delivered price at the height of the boom just before the Olympics.

The interesting point was that in 2008 the freight accounted for about 50% of the cost i.e. nearly $100 a tonne, wheras now the frieght is only worth about $20 a tonne.

A good time to buy shares in some of the worlds mining companies.

Iain

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A good time to buy shares in some of the worlds mining companies.

Iain

Fair point (Thumb) and we see from Tradewinds a moment ago:


Rio Tinto bullish on dry

Rio Tinto is bullish about long-term prospects for the dry-bulk industry but warned of volatility in the short term.

The mining behemoth, which earlier this month announced it was in discussions with customers about quarterly iron ore contracts, saw production grow in the first quarter.


Unsurprisingly China spearheaded the surge in demand but many other kernel economies also recorded growth, the miner claimed.

Tom Albanese, Rio’s chief executive, wrote in Thursday’s operations review: “In the first quarter most of our operations continued to run at capacity. Chinese demand grew strongly and we saw some recovery in OECD markets.”

Global iron ore production for the miner in the first three months of 2010 shot up 39% year-on-year, although the comparable period in 2009 was hampered by heavy rains in mining regions. Iron ore production from Rio’s core Pilbara region in Western Australia hit 53 million tons in the quarter, a 48% hike.

Australian hard coking coal production shot up 35%, bauxite up 18% and gold and molybdenum up 12% and 58% respectively.

Copper production, however, slipped 16%, mainly due to lower grades, while uranium fell off 20% and Australian thermal coal 8%.

Overall, however, Rio remains upbeat on prospects for dry-bulk markets, Albanese commenting: “The long-term outlook remains very strong and we are now ramping up our growth projects with sustained investment in our iron ore business.

“But we are still cautious about short term volatility.”