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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, 27 February 12
INDONESIAN COAL EXPORTS TO CHINA DROPS 39.76 PERCENT IN JANUARY 2012
COALspot.com: Indonesia, the world largest coal exporter, shipped 28.21* mln mt of coal in January 2012, slightly lower than its December 2011 ...
Monday, 27 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The pessimism in the dry market persists with the Baltic Dry Index still trying to find a steady pace of growth and average time charter earnings fo ...
Sunday, 26 February 12
THE FREIGHT RATES FOR INDONESIA TO INDIA IS LIKELY TO BE FIRM FOR NEXT 2/3 WEEKS - VISTAAR
COALspot.com – “There was not much change in the BDI and other indices this week except for the Panamax which was down by 11.91 pc ...
Friday, 24 February 12
DRY BULK MARKET POSTS FIRST REBOUND IN A WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was expected since mid-week, the dry bulk market's benchmark, the BDI (Baltic Dry Index) has managed to put a stop in a 6-day losing rally, endi ...
Thursday, 23 February 12
2.5 PANAMAX VESSELS PER AVAILABLE CARGO FOR MARCH DATES - FEARN BULK
Handy
Another depressing week for Supras in both basins. Lack of fresh business and over-supply of tonnage in the Atlantic pushed rates south. Cont ...
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- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
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