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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, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
Friday, 18 May 12
KOREA EAST WEST POWER LOOKING FOR TOTAL 2.6 MILLION TONS OF 4600 NAR COAL AT FIXED PRICE FOR 5 YEARS
COALspot.com - Korea East West Power Co., Ltd is inviting bids to supply of 520,000 Metric Tons (per annum) of minimum 4,600 kcal/kg coal of N ...
Friday, 18 May 12
NICKEL ORE CARGOES ARE NOT SEEN IN MARKET ANYMORE DUE TO ON-GOING INDONESIAN BAN - FEARNLEYS AS
Handy
The market remained variable.
Fronthaul voyages both from Baltic and Black Sea paid over USD 18k/day. From USG to Cont tonnage would get ...
Thursday, 17 May 12
COAL MINERS OPPOSE EXPORT TAX, SUGGEST OUTPUT QUOTA - THE JAKARTA POST
The Jakarta Post reported that, coal miners have suggested that the government apply a production quota instead of implementing an export tax in ord ...
Thursday, 17 May 12
DRY BULK MARKET STILL LOOKING FOR NEW DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on moving sideways during this week, with the mixed performance across all segments. Yesterday, the industry’s be ...
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- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- White Energy Company Limited
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- The University of Queensland
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
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