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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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- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Planning Commission, India
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
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