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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Monday, 05 March 12
SOUTHGOBI ANNOUNCES AGREEMENT TO SELL ITS THERMAL COAL TSAGAAN TOLGOI DEPOSIT FOR US$ 30 MILLION
SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) announced today an agreement to sell its thermal coal property, the Tsagaan Tolgoi Deposit to Modun Re ...
Monday, 05 March 12
SOME RESOURCE TITANS NOT THRILLED WITH INDONESIAN EXPORT BAN - THE JAKARTA GLOBE
The Jakarta Globe reported that, local representatives of major business associations in East Kalimantan have protested a government regulation that ...
Monday, 05 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
An air of optimism poured in the market this week for dry bulk shippers with the Baltic Dry Index recording daily gains during the end of February b ...
Sunday, 04 March 12
SE ASIA WAS FIRM FOR TRIPS TO INDIA AND CHINA - VISTAAR
COALspot.com - This week saw another upward trend with all indices up and generally market was firm.
The BDI was up by 7.38 pct closing at 771 po ...
Friday, 02 March 12
DJMBP HAS ANNOUNCED SECOND BATCH OF CLEAR N CLEAN CERTIFIED MINERS
COALspot.com - The Directorate general of mineral & coal of Indonesia has announced second batch of companies who have passed IUP Clear and Clea ...
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- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Planning Commission, India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Interocean Group of Companies - India
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