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Monday, 27 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 The pessimism in the dry market persists with the Baltic Dry Index still trying to find a steady pace of growth and average time charter earnings for all vessel classes floating at significantly lower levels than 2011. The steel market fundamentals have brought very low earnings for all dry bulk carrier vessels, even for smaller ones handies/supras, which were outperforming last year when capesizes and panamaxes were suffering. There are still hopes for improvement in March and onwards since January and February are seasonally weak months with Chinese buying less iron ore due to National Festivities and hefty stockpiles. Inventories at key Chinese steel mills monitored by China’s Iron & Steel Association reached 10.98 million tones by the end of January, the highest since the second half of 2009 and rising 24.5% from early January. CISA said in its monthly Report that it will be difficult for demand to improve significantly during end February to early March and inventories are likely to continue rising.
The world crude steel production for the 59 countries reporting to the World Steel Association was 117 million tonnes (Mt) in January 2012. This is -7.8% lower than January 2011. China’s crude steel production for January 2012 was 52.1 Mt, a decrease of -13% compared to January 2011. Elsewhere in Asia, Japan produced 8.6 Mt of crude steel in January 2012, a decrease of -10.6% compared to the same month last year. South Korea’s crude steel production for January 2012 was 5.1 Mt, -9.6% down compared to January 2011.
Despite the BDI lost again ground by falling every day during last week it finally ended to close in green with an improvement on Friday by earning 12 points from Thursday’s closing. The BDI closed at 717 points by gaining only 1 point from previous week’s closing of 718 points. Overall, all Baltic Dry Indices closed on green apart from panamaxes. There was an upturn in the capesize segment, a downward trend for panamax and a stronger performance in the supramax and handysize segments. The handysize segment showed the largest increase by gaining 16 points from last week, up 4.2% and ending at 395 points with vessel earnings near to $5,900/day in contrast with a 12% decline in the Baltic Panamax Index by loosing 113 points on a weekly basis and ending at 836 points. The BPI has surpassed the 1,000 points mark in mid February, by standing at 1018 points on February 14th, a yearly high level.
For large size vessels, capesizes, which typically transport 150,000 ton cargoes of iron ore and coal, the BCI ended by gaining 43 points on a weekly basis, up by 2.94% standing at 1504 points with a significant bounce back on Friday. Capesize earnings rose to $5,699/day from the yearly low of $5,158 on February 21st with China boosting its cargo demand loadings from Brazil and Australia. According to a London based analyst at derivatives broker Freight Investor Services Ltd there has been clearly some Chinese buying at these low freight levels that is sufficient to move rates up slightly. Prices (TSIPIO62) for iron ore imported into the Chinese city of Tianjin increased for a fifth session, gaining 0.2 percent to $139 a metric ton, according to figures from the Steel Index Ltd.
Spot prices of imported iron ore in China rose on Friday as traders bid up the market, betting on a recovery in domestic steel demand when construction projects resume next month. According to traders, global miner BHP Billiton sold several cargoes this week at prices around $3 more than previous deals. Australian Pilbara iron ore fines with 61.5 percent iron content was quoted at $138-$140 a tonne, cost and freight, up $2 from Thursday, according to Chinese consultancy Umetal. “Some traders are trying to push up the price because they think steel demand would pick up in March when the weather returns better and construction activity resumes in China”, he said. BHP rivals Rio Tinto and Vale were also offering more cargoes on Friday. Iron ore with a 62% content rose 2.1% to $138.70 per tonne on Thursday, its biggest percentage gain since December 21st, according to Steel Index price provider.
Panamax vessels, which usually transport 60,000-70,000 tonne cargoes of coal and grain, experienced severe decline with earnings falling below $7,000/day, when last year were earning around $14,000/day, and the BPI loosing 113 points from last week’s closing, down by 12% and standing at 836 points. The segment is feeling the pain from overcapacity with at least one panamax, kamsarmax or post panamax being delivered into service every day so far this year. Owners in the Atlantic are said to subsidizing their operating expenses as they are not earning enough to cover the cost of bunkers on ballast legs. With all February grain cargoes from east coast South America fixed to ships earlier this month, the vessels being booked at the moment for March loading dates are almost exclusive those ballasting from the Pacific markets.
Supramax vessels, which carry about 25 percent less than Panamaxes, showed healthier levels from a distressed Atlantic status with earnings rising near to panamax levels of about $6,900/day and the BSI gaining 21 points, up by 3.2% from last week’s closing and standing at 662 points. In addition, handysize units gained a sharp increase of 4.2% with the BHSI standing at 395 with earnings rising to $5,980/day, almost 40% lower than previous year when they earning near to $10,000/day.
Even the positive upturn seen during the last week in the freight markets there is still a road ahead for full recovery since the vessels’ glut is still a major threat for the dry bulk market and Chinese iron ore import market sentiment remains fragile with spot iron ore prices dropping on the increase of port stockpiles. The benchmark iron ore price trading was at $140/tonne in recent months from a record high of $180/tonne seen last year. The chief executive officer of Rio Tinto, the second largest supplier of iron ore, sees a period of volatility of six months for the iron ore market before stabilizing.
The steel needs from China and other developing countries are expected to ensure strong commodity demand on the long term, he added. "The world is an uncertain place at the moment and we have seen some softness in China, but demand remains strong," he said.
China alone will require at least another 100 million metric tons of iron ore a year for the next eight years, including 600 million tons in that period to satisfy growth and 200 million to replace the expected exit of high-cost supplies, he said, adding that Rio plans to contribute about a quarter of this additional ore to China.
The move of China to cut banks’ reserve requirements ratio by 0.5% to be effective from February 24th and Vale’s decision to move to spot iron ore pricing may be two positive key developments for the future of dry bulk earnings. Vale has announced that it will sell 80% of its iron ore at spot market pricing, which satisfies Chinese steelmakers by gaining from falling iron ore prices. February has almost ended and BDI has not still managed to break the psychological barrier of 1,000 points mark with earnings for capesize vessels trading at similar levels with handysizes. March may be a healthier month for large size units as Chinese iron ore stockpiles has shown a sense of retreat during the last days of February, by falling less than the record high of 100 mil tones seen almost two weeks ago, and a boosted Chinese cargo buying demand that increased capesize loadings from Australia and Brazil.
Source: Maria Bertzeletou, Hellenic Shipping
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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Australian Coal Association
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
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