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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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Wednesday, 12 October 11
CAPESIZE - A SURPRISE JUMP IN RATES - BRS
There was a surge across all sizes last week, resulting in the BDI gaining 101 points to end the week at 2,000 points (+5.3%). The BCI reached 3,218 ...
Wednesday, 12 October 11
CAPESIZE FREIGHT RATES BOUND TO RETREAT FROM 2011 HIGHS ON THE BACK OF TONNAGE OVERSUPPLY SAYS BIMCO
According to Nikos Roussanoglou, Hellenic Shipping, with the BDI (Baltic Dry Index) breaking yet another 2011 high yesterday and ending the se ...
Tuesday, 11 October 11
GLENCORE, SUITOR FOR BUMI PLC? - INSIDER STORIES
Insider Stories reported that, the largest commodities trader in the world, Glencore International Plc, is considering an opportunity to acquire a m ...
Tuesday, 11 October 11
RENUKA COALINDO BUYS JAMBI COAL
PT Renuka Coalindo Tbk, formerly PT Allbond Makmur Usaha Tbk plans to acquire PT Jambi Prima Coal holder of mining concession in Pauh, Sa ...
Monday, 10 October 11
MOZAMBIQUE CHANNEL TO BE THE NEW PIRACY HOTSPOT FOR THIS YEAR SAYS MARITIME SECURITY EXPERT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Mozambique Channel, as well as the entrance to the Persian Gulf, are expected to become some of the new pirate hotspots for piracy, says Richard ...
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- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Economic Council, Georgia
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
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