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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, 18 October 11
INDONESIAN PRESIDENT APPOINTS JERO WACIK AS NEW MINISTER OF ENERGY & MINERAL RESOURCES
COALspot.com - Jero Wacik has been appointed as minister of energy and mineral resources of Indonesia replacing Darwin Saleh and Prof. Widjajono Par ...
Tuesday, 18 October 11
DELTA DUNIA MAKMUR HAS PRODUCED 3.0 MILLION TONS OF COAL LAST MONTH
COALspot.com - PT. Delta Dunia Makmur, wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur has removed 1.4 million bcm ...
Monday, 17 October 11
KOWEPO TO BUY 260,000 MT BITUMINOUS COAL
COALspot.com - KOWEPO has issued a spot tender for 260,000MT of minimum 5,600kcal/kg NAR Bituminous Coal.
The tender document also mentioned tha ...
Monday, 17 October 11
CAPESIZE SHIPPING COSTS CLIMB TO 10-MONTH HIGH ON ORE IMPORTS
The cost to hire capesize vessels climbed to a 10-month high as rising imports of iron ore to China boosted demand for the ships.Monthly iron-ore sh ...
Saturday, 15 October 11
BUNKER PRICES AND DEMANDS PUSHED FREIGHT RATES UP - VISTAAR
COALspot.com - The market continued to be firm with all segments moving up with biggest gain in Handy size segment up by 15 pct. The BDI was u ...
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- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- The University of Queensland
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- MS Steel International - UAE
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
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