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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, 27 September 11
A STRONG REBOUND FOR THE CAPE MARKET - BRS
A strong rebound for the Cape market, as cargoes continued to flow into the market and tonnage remained tight in the Atlantic, according to Barry Ro ...
Tuesday, 27 September 11
INTRACO SEALS US$25.3 MIO ORDER - INSIDER STORIES
Insider Stories reported that, Heavy equipment distributor PT Intraco Penta Tbk (INTA) obtained a US$25.3 million order on hand of heavy equipments ...
Sunday, 25 September 11
THE CHARTER RATES FOR INDONESIA TO INDIA WAS FIRM - VISTAAR
COALspot.com - The freight market moved up sharply with the cape Index up by 11 pct pushing the BDI by almost 6 pct and closing at 1,920 point ...
Saturday, 24 September 11
GOVT PLANS TO RENEGOTIATE ALL CONTRACTS INCLUDING FREEPORT - JP
The Jakarta Post reported that, the Energy and Mineral Resources Ministry has confirmed plans to renegotiate all mining contracts including those wi ...
Friday, 23 September 11
ICMA TO BUILD UPGRADE FACILITIES TO ANTICIPATE BAN ON LOW-GRADE COAL EXPORT BY 2014
COALspot.com - January to August of this year, Indonesia’s coal production had already reached 235 million tons. Earlier estimates had targete ...
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- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Minerals Council of Australia
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Aditya Birla Group - India
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
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