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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
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