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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, 10 January 12
THE 4TH DEEPWATER ASIA CONGRESS 2012 WILL KICK OFF ON MAY 23 - 25
Press release - Based on the past three years’ success, SZ & W Group is excited to announce the 4th Deepwater Asia Congress will be held o ...
Monday, 09 January 12
2012: WHAT WILL IT BRING FOR THE DRY BULK MARKET? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A further increase in dry bulk demand could be the remedy for most of the industry's oversupply issues, together of course with the high level of s ...
Sunday, 08 January 12
ICICI OUTLOOK ON INDIAN POWER, MINING,CEMENT, AND SHIPPING SECTORS PERFORMANCE IN 2012
Broking firm, ICICIdirect (India) has come out with report on sectors outlook for 2012. IRIS has collated key highlights for each sector from ...
Sunday, 08 January 12
SUPRAMAX DELIVERY SOUTH CHINA FOR TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7000 PER DAY - VISTAAR
Wish You a Very Happy and Prosperous New year 2012.
COALspot.com - The last report by us was on 16th Dec 2011 and because of holidays this would ...
Sunday, 08 January 12
THARPAK CONSORTIUM FORMED TO DEVELOP MEGA ENERGY COMPLEX IN SINDH PROVINCE, PAKISTAN
Press Release: On January 5th, TharPak, LLC met with officials of the Embassy of Pakistan in Washington DC to introduce and announce the formation o ...
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- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Economic Council, Georgia
- PTC India Limited - India
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- The University of Queensland
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
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