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