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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Saturday, 15 October 11
BENGAL COAL IMPORT TEST - THE TELEGRAPH
The Telegraph reported that, the power position in Bengal improved today but alarm bells are ringing over imported coal stocks that are running out ...
Friday, 14 October 11
CAPE DERIVATIVES MARKET HAS NOT REFLECTED OWNERS EXPECTATIONS' - FEARNBULK
Handy
The Atlantic market continued its upward trend, with fresh cargo entering the market. Skaw Passero to US Gulf climbed US$ 1500 from la ...
Friday, 14 October 11
ADARO BUYS SERVO MEDA FOR RP200 BIO - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) announced that its subsidiary PT Alam Tri Abadi (ATI), acquired 35% stake in PT Serv ...
Thursday, 13 October 11
DRY BULK MARKETS RALLY CONTINUES, BUT ANALYSTS WARN IT WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market continued its push forward yesterday, for yet another session, as the BDI (Baltic Dry Index), the industry’s benchmark edg ...
Wednesday, 12 October 11
INDONESIAS COAL RUSH - JOSEPH KIRSCHKE
COALspot.com - Last winter, the Chinese government mobilized thousands of soldiers and reservists of the People’s Liberation Army to the port ...
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- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Central Electricity Authority - India
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Planning Commission, India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
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