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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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Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
Wednesday, 26 October 11
PWCS GLOBAL SHIPPING BENCHMARKING ANALYSIS: RECOVERY IN 2010 BUT GREAT UNCERTAINLY FOR 2011
The recovery of global trade in 2010 to the same levels as 2008 led to an improvement in the overall performance of shipping companies in 2010 compa ...
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- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Planning Commission, India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Australian Coal Association
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- White Energy Company Limited
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
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