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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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- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Parliament of New Zealand
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
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