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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, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- The University of Queensland
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
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