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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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Thursday, 26 April 12
PANAMAXES AGAIN EARN MORE THAN CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of demand for Panamaxes has led the dry bulk market to new higher ground on Monday, with the Baltic Dry Index (BDI) reaching 1,090 ...
Wednesday, 25 April 12
CHINA IMPORTS 9.76 MMT AND INDIA IMPORTS 7.03 MMT OF INDONESIAN COAL LAST MONTH
COALspot.com: Indonesia, the world largest coal exporter, shipped 30.64* million tons of coal in March 2012, compared to 27.12* million tons i ...
Monday, 23 April 12
ALTURA ENTERS INTO AGREEMENT TO ACQUIRE 2 COAL PROJECTS IN SOUTH KALIMANTAN
COALspot.com - Altura Mining Limited (ASX: AJM) has announced that it has entered into an agreement to acquire a further two (2) Mining Permits (IUP ...
Sunday, 22 April 12
THE FREIGHT MARKET EXPECTED TO REMAIN FIRM NEXT WEEK - VISTAAR
COALspot.com - The BDI has broken the psychological barrier of 1000 points and closed at 1067 points.
The cape index was slightly down by 2.48 pc ...
Saturday, 21 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP 2.61 PERCENT THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps fell for a fifth day, according to DSP of SGX AsiaClear OTC Coal Swaps.
CFR South China Coal ...
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- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Aditya Birla Group - India
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Australian Coal Association
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
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