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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, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
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