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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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Saturday, 04 February 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 6,000 PER DAY - VISTAAR
COALspot.com - The markets continued to soften which dropped by almost 11 pct and BDI closing at 647 points.
The drop in BDI was mainly due to dr ...
Thursday, 02 February 12
NO RELIEF YET FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although at the start of 2012 nobody can claim that the global seaborne trade has suddenly come to a halt, quite the contrary, it seems that the dry ...
Wednesday, 01 February 12
KRISHNAPATNAM PORT - GOING DEEP TO SOAR HIGH
COALspot.com - Krishnapatnam Port now rightfully claims as the deepest draft port in India, as it has started accepting vessels with maximum permiss ...
Wednesday, 01 February 12
IN JAMBI, MOST MINING COMPANIES LACK 'CLEAR-AND-CLEAN' PERMITS - JP
More than three-quarters of the 386 mining companies in Jambi lack “clear-and-clean” certifications from the government, according to an ...
Wednesday, 01 February 12
2% OF IBPS TOTAL CONCESSION AREA CONTAINS TOTAL COAL RESOURCE OF 56.1 MILLION TON
COALspot.com - PT. Britmindo, a mine consulting firm, has finalized PT. Insani Bara Perkasa (IBP) first JORC (Joint Ore Reserves Committee) res ...
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- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- VISA Power Limited - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Planning Commission, India
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Mercator Lines Limited - India
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