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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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Wednesday, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
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- Tata Chemicals Ltd - India
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
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- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Australian Coal Association
- White Energy Company Limited
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- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Economic Council, Georgia
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- Indogreen Group - Indonesia
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- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
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- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
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- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
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- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
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- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
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