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Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
 The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to levels near or below operating expenses. The Baltic Dry Index closed at 717 points on Friday of February 17th, gaining only two points more than the previous week’s closing and it is now standing 55 points above from the historical low level in the last 26 years of 662 points on February 1st. The dry market normally shows a plunge at the beginning of every year as Chinese festivities bring a lull in iron ore buying activity with the BDI finding its pace upon the return from holidays. However, the index now seems that struggles to keep a steady pace of growth since it is still below the psychological barrier of 1,000 points and it is unquestionable if would surpass this level till the end of February. Following its positive upward movement in the previous week by gaining 68 points more on a weekly basis and panamaxes being the best performers, the sentiment is again distrustful with capesize earnings being extremely flat and handysizes showing a stronger resilience this week.
The BHSI showed a 3.5% week-on-week increase in contrast with a 1.8% week-on-week fall in the BPI from its 39.5% remarkable increase in the week ending February 10th. Overall, the BDI showed a minimal rise of 0.2% on a weekly basis by falling for the last three consecutive days of the week and ending to loose 12 points from the high of 729 points at the beginning of the week. Average time charter earnings for all vessel sizes are still floating at low levels, below $10,000/day, with increased worries for a prompt revival before the end of the first quarter of the year. Panamax and supramax vessels seem to have a better outlook to break the barrier of $10,000/day by earning ground from a strong Chinese coal demand, while capesizes may suffer for a longer period of time since the Chinese iron ore buying appetite, the main driver for healthier capesize earnings, is still fragile.
For large size vessels, capesizes, the market was extremely flat with the BCI gaining only 4 points more at the end of the week by closing at 1461 points, up by 0.27% on a weekly basis. The Atlantic market remains particular inactive despite some iron ore activity from Western Australia. W Australia/Qingdao rates is said to have improved only slightly, to $7,70/tonne, compared to $7,60/tonne last week. In the panamax market, the week opened with a degree of optimism with the index surpassing the 1,000 points mark level, but by the end of the week it fell to 949 points, loosing 18 points, down 1.86% from previous week’s closing.
The week ended also negative for supramax owners with a retreat of decline in Atlantic supramax rates and a rise in Pacific from record lows. Owners with tonnage in the European side found almost impossible to consider the ballast option at the prevailing freight rates and bunkering expenses, while owners in the East with tonnage seem to have better chance with rates covering operating expenses. Some reasonable mineral business from Indonesia gave a substance in the segment with the BSI loosing only 4 points from previous week’s closing and ending at 641 points, down by 0.6% week-on-week basis.
The current status of China’s steel market and the high levels of iron ore inventories do not currently support massive iron ore imports enough to lift the BDI above 1,000 points and capesize earnings at the levels of more than $10,000 day.
According to Data from the General Administration of Customs, imports by China, the world’s biggest buyer of the steel making ingredient, fell 7.4% to 59,32 million tons in January from a month earlier due to the Lunar New Year holiday. Even January gives a distorted picture for Chinese buying sentiment due to National Festivities; China’s steel market remains sluggish. The China Iron and Steel Association reported that daily crude steel production averaged 1,67 million tons from January 21 to January 31. This is similar with the average daily production that occurred during January 11 to January 20, but is down significantly from last year’s record of 2,02 mt average daily production that occurred during June 21 to June 30.
Furthermore, Chinese iron ore inventories reached the alarming level of nearly 100 million mt by the beginning of February and fell to 99.97 million tons by February 13th, but it is still hefty and indicates the slump in demand for steel production in China. Due to lower demand as a result of the slowing economy and tight liquidity, steel prices have been plunging since last October, leaving steel mills with marginal profits or making losses. Major mill Angang Steel, for instance, announced a net loss of some 2.2 billion yuan for 2011 due to rising raw material costs. CISA Chairman Zhu Jimin said that the possibility of losses and meager profits for steel mills is likely to increase this year as increased costs, falling demand and financing difficulties will continue to distress the steel industry.
The hefty amount of Chinese inventories and the lower from the biggest consumer China have plunged the iron ore price last week in the lowest level since October. Ore with 62 percent content at the Chinese port of Tianjin fell 1.6 percent to $137.40 per metric ton on Thursday 16th, data from The Steel Index showed. Vale S.A., the world’s second largest miner by volume, reported a 20% fall in its net profit for the fourth quarter of last year by recording $4,67 billion compared with a $5,92 billion a year earlier, citing as primary reason the decline in the iron ore price. Vale reported quarterly sales of $14,8 billion from reduced iron ore prices and the debt crisis that caused European shipments to slump. Credit Suisse predicted in a report that tighter market conditions would continue in 2012 with iron ore prices expected to be weaker. The report stated Brazilian iron ore miners will face lower year-on-year results due to lack of volume growth and 10% lower year on year average price.
However, Australia’s mega iron ore producers are planning to boost production amid current slow Chinese steel demand. Australia supplies about 43 percent of China's iron ore imports, with most coming from BHP, Rio and Fortescue. According to Bank of America-Merrill Lynch forecasts, China's steel demand is expected to grow 6 percent in 2012 and 5.8 percent in 2013, down from the stunning 12.8 percent compound annual growth during 2008-11.
BHP Billiton Ltd., the biggest mining company, said Feb. 12 a price decline probably won’t affect plans to spend $80 billion over the next five years to boost output along with copper and coal. “The Chinese have been buying well in advance,” said Gavin Wendt, founder and senior resource analyst at Mine Life Pty in Sydney. “They like to buy these commodities when the price is low and buy it in significant volumes, essentially more than what they need and stockpile it”.
Fortescue Metals Group is under a construction program to nearly triple production to 155 million tonnes in a year after securing funding last October. Fortescue Metals Group expects iron ore prices will remain around $US140 ($A131.48) per tonne in the short-to-medium term as Chinese demand remains strong but little new supply comes onto the market.Rio Tinto also assigned $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Tuesday, 01 November 11
DRY BULK MARKETS CORRECTION SPILLS OVER ONTO NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is losing steam, as evidenced by the falls experienced last week, which were also apparent at the beginning of the new week. A l ...
Monday, 31 October 11
CHINAS HUNGER FOR INDONESIAN COAL AT THREE YEAR-HIGH AS WINTER NEARS - JOSEPH KIRSCHKE
COALspot.com - Chinese demand for power-station coal from Indonesia has soared to its highest level in three years, as central heating plants and po ...
Saturday, 29 October 11
ATLAS RESOURCES SEALS US$95 MIO LOAN - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, has secured US$95 mill ...
Saturday, 29 October 11
INDONESIA TO INDIA FREIGHT LIKELY TO REMAIN SOFT
COALspot.com - The market continued to slow down and all segment were down this week.
The biggest drop was in the Cape Index down by 8.19 pct&nbs ...
Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
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- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Deloitte Consulting - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
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