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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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Thursday, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
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- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- The University of Queensland
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- VISA Power Limited - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Planning Commission, India
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
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