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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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Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- Thai Mozambique Logistica
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- The University of Queensland
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
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