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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, 06 October 11
SOUTH EAST ASIAS AGGRESSIVE POWER DEMAND GROWTH WILL REQUIRE INVESTMENT OF US$125 BN BY 2020 - WOOD MACKENZIE
COALspot.com - Wood Mackenzie says that South East Asia’s demand growth for new power generation is so aggressive that new power generation in ...
Thursday, 06 October 11
CHINESE DEMAND FOR COAL IMPORTS TO MODERATE IN 2012 - MISWIN MAHESH
COALspot.com - We expect Chinese demand growth for imported steam coal to moderate over the next year. Steam coal imports into China will modera ...
Wednesday, 05 October 11
MINISTRY STICKING TO RAW COMMODITY EXPORT BAN DESPITE INDUSTRY FEARS - JG
The Jakarta Globe, the one of the leading English news paper in Indonesia, reported that, the details of a controversial new regulation that would b ...
Wednesday, 05 October 11
ATLANTIC AND PACIFIC BASINS BECAME TIGHTER FOR PANAMAX LAST WEEK - BRS
A slump for both the Capes and Panamaxes sent the BDI down 1% this week, falling to 1,899 points.
The Capes saw the greatest movement, sliding - ...
Wednesday, 05 October 11
WITH CHINA ON HOLIDAY, DRY BULK MARKET REMAINS STAGNANT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has remained to healthy levels after last month’s rally, but with China going on holiday this week, things are looking sta ...
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- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
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