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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, 20 April 12
PANAMAXES LEAD DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A rebound of demand for smaller dry bulk carriers has led the industry’s benchmark, the BDI (Baltic Dry Index) above the 1,000-point mark for ...
Friday, 20 April 12
BUMA HAS PRODUCED 2.6 MILLION TONS OF COAL IN MARCH 2012
COALspot.com - BUMA has removed 28.0 million bcm (+6.4% YoY) of overburden in March 2012 while coal production was at 2.6 million tons (+1.3% YoY).
...
Thursday, 19 April 12
FRESH COAL SALES FROM JATENERGYS JONGKANG MINES
COALspot.com - Energy company Jatenergy Ltd (ASX code JAT) announced today that it had signed a contract for an 11,000 tonne coal sale due for shipm ...
Thursday, 19 April 12
HANDY - 'POSITIVE TREND', PANAMAX - 'A FIRMER TENDENCY', CAPESIZE - 'AGAIN NEGATIVE'
Handy
The positive trend from last week continued, with more cargoes entering the market. Skaw/Passero del fixed tick above USD 4000 for US Gulf di ...
Thursday, 19 April 12
WILLIS MARINE MARKET REVIEW FORECASTS ANOTHER DIFFICULT YEAR - WILLIS GLOBAL MARINE / HELLENIC SHIPPING
After an inauspicious start, 2012 could well be "another difficult and uncertain year for the maritime industry faced with the aftermath of the ...
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- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Planning Commission, India
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
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