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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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Tuesday, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
Monday, 07 May 12
INDONESIAN HBA FALL AGAIN IN MAY 2012
COALspot.com - Indonesian HBA fall again to lowest level since January 2011 in May 2012. The monthly coal reference price for coal sales in Ma ...
Sunday, 06 May 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA SWAPS SLIGHTLY DROP THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries slightly dropped this week.
According ...
Sunday, 06 May 12
S7 & S8 ROUTES LIKELY TO BE FIRM NEXT WEEK VISTAAR SINGAPORE
COALspot.com - The BDI remained flat this week and was up just by 1 point closing at 1,157 points.
The cape size index was up by 5.14 pct closing ...
Sunday, 06 May 12
EXPORT DUTY ON MINERAL FINALLY TO BECOME EFFECTIVE NEXT WEEK
COALspot.com - Mineral ore exporters of Indonesia ( only IUP holders) are required to obtain recommendation letter from the energy and mineral ...
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- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- MS Steel International - UAE
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
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