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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Friday, 30 September 11
INDIAN IRON ORE MARKET GETTING ACTIVE - FEARNLEYS AS
Handy
The Atlantic market continued its strong trend with fresh cargoes entering the market. Vessels open US Gulf fixed tick above US$ 27k back to t ...
Friday, 30 September 11
KRISHNAPATNAM PORT WINS GLOBAL PORT & COAL PORT OF THE YEAR AWARDS
COALspot.com - Krishnapatnam Port, a dynamic new generation world class port located in the East Coast of India has been adjudged the winner in the ...
Thursday, 29 September 11
INDONESIA'S MINERS FACE AN UNCERTAIN FUTURE - RUPERT WALKER
An evolving regulatory framework for the country's minerals industry could threaten its profitability and stifle investment.
The five-year surge ...
Thursday, 29 September 11
DRY BULK MARKET FALLS MID-WEEK, FURTHER DROP EXPECTED NEXT WEEK ON CHINA HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected by the Baltic Dry Index (BDI) retreated by 0.36% yesterday reaching 1,920 points, with the Capesize segment suffer ...
Wednesday, 28 September 11
ATLAS RESOURCES TO SELL 25% STAKE IN IPO - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, plans to sell 783.33 m ...
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- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
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