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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Sunday, 19 February 12
THE SPOT FIXTURE RATES WERE REPORTED AT HIGH LEVELS - VISTAAR
COALspot.com - "The markets seems to holding back this week appears the momentum which picked up last week may slow down" - Capt. Reddy of ...
Sunday, 19 February 12
INDIKA ACQUIRES MULTI TAMBANGJAYA - INSIDER STORIES
Insider Stories reported that, PT Indika Energy Tbk (INDY) announced that wholly-owned subsidiaries have signed a conditional sale and purchase agre ...
Friday, 17 February 12
COLOMBIA COAL PRODUCTION, EXPORTS JUMP IN 2011: GOVT - COLOMBIA REPORTS
Colombia Reports reported that, colombia's coal production jumped 15.4% in 2011 to 85.8 million tonnes versus the previous year while exports rose ...
Thursday, 16 February 12
GEARING UP FOR THE EMERGING OIL & GAS OPPORTUNITIES IN MYANMAR
Press Release - Myanmar Ministry of Energy and Centre for Management Technology (CMT) to Co-host MOGP (Myanmar Oil, Gas & Power) Summit on 28 - ...
Wednesday, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
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- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
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