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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, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
Thursday, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
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- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- PTC India Limited - India
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Siam City Cement PLC, Thailand
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