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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Thursday, 22 March 12
ECI-CHINA HANDY RATES ARE AROUND US$ 8000 - FEARNLEYS
Handy
Another positive trend was seen last week with more cargoes entering the market. Skaw-Passero/US Gulf climbed slowly up to USD 3700, while US ...
Thursday, 22 March 12
DRY BULK MARKET KEEPS SURGING, CAPESIZES FALLING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what seems to be an establishing pattern, the dry bulk market has kept its upward momentum, edging closer to the 900 point-mark, but the larger s ...
Wednesday, 21 March 12
BUMA HAS PRODUCED 2.3 MILLION TONS OF COAL IN FEBRUARY 2012
COALspot.com - PT. Delta Dunia Makmur's overburden removal in February 2012 has reached totaled 23.8 million bcm (+2.4% YoY) while coal production ...
Tuesday, 20 March 12
SMALLER DRY BULK VESSELS STILL LEADING DRY BULK MARKET TO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been growing during the past couple of weeks, but contrary to the usual practice, it’s not the larger Capesizes which ...
Monday, 19 March 12
WEEKLY DRY MARKET OVERVIEW: SMALLER VESSELS LEAD RATES HIGHER - MARIA BERTZELETOU, HELLENIC SHIPPING
The upward trend of the Baltic Dry Index persists strong from the end of February, spurred from the supramax market that offsets the weakness in the ...
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- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Marubeni Corporation - India
- ICICI Bank Limited - India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
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