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