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