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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, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Planning Commission, India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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