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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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Monday, 28 May 12
COAL EXPORTS ARE JUMPING HIGHER, BUT PRICES ARE FALLING LOWER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31.86* million tons of coal in April 2012, compared to 30.64* million tons i ...
Sunday, 27 May 12
THE FREIGHT MARKET FROM INDONESIA TO INDIA WAS WEAK - VISTAAR
COALspot.com - The BDI continued to fall for the fourth straight week and the BDI fell by 9.38 pct this week closing at 1,034 points.
The Cape Si ...
Sunday, 27 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS HEADING TO SOUTH DIRECTION
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries have dropped this week by 5.43 percent an ...
Saturday, 26 May 12
DRY BULK SHIP OWNERS LOOKING TO CUT BACK ON TONNAGE SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of dry bulk carriers has been the most prominent problem in the market today, pushing down rates and ‘strangling’ profita ...
Thursday, 24 May 12
DRY BULK MARKET RETREATS ON LACK OF CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated yesterday on the back of lower Chinese demand for commodities such as coal and iron ore, typically hauled by dry bulk ...
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- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Parliament of New Zealand
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Australian Coal Association
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
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