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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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Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
Wednesday, 11 January 12
NEWBUILDING ORDERS DECLINE, AS SHIP OWNERS REALIZE OVERSUPPLY WILL "KILL" THEM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With 2012 now underway, it will be rather interesting to see how ship owners will play the "newbuilding ordering" card to their favor, as ...
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- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
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