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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
Thursday, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
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- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Borneo Indobara - Indonesia
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Australian Coal Association
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
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