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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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Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
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- Xindia Steels Limited - India
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
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