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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, 01 May 12
VIETNAM FEARS IT MAY NOT SEEK COAL SUPPLIES - TBKTSG / VIETNAMNET BRIDGE
TBKTSG / VietNamNet Bridge reported that, with five coal-run thermopower plants under construction, PetroVietnam alone would need 18 million tons of ...
Sunday, 29 April 12
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The BDI continued to go up with the support of Panamax/Supramax and was up by 8.34 pct closing at 1,156 points.
The cape index was ...
Sunday, 29 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS FOR MAY 2012 DELIVERY WAS STABLE THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps for May deliveries stable this week, according to DSP of SGX AsiaClear OTC Coal Swaps. In the me ...
Friday, 27 April 12
BUKIT ASAMS NET INCOME UP 14% IN 1Q 2012 (UNAUDITED)
Press Release - PT Bukit Asam (Persero) Tbk, announced the Consolidated Financial Statements and Subsidiaries per 31 March 2012 (Unaudited).
Reve ...
Thursday, 26 April 12
AUSTRALIAS COKAL EXPANDS MET COAL POTENTIAL INTO WEST KALIMANTAN
COALspot.com - Global metallurgical coal group Cokal Limited (Cokal) (ASX:CKA) announced today it has completed the acquisition of 75.2% of PT Silan ...
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- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Agrawal Coal Company - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Ministry of Mines - Canada
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
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