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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, 07 January 12
COAL MARKETS SEE FALLING SPOT PRICES
COALspot.com – World’s thermal coal spot prices have slipped this week..
globalCOAL index in Newcastle Port, benchmark for Asian mark ...
Friday, 06 January 12
COAL INDIA LINKED COAL PRICES WITH INTERNATIONAL COAL PRICES
COALspot.com - Consumers of indigenous coal in India to pay International prices in the future. Coal India has recently moved from UHV pricing mecha ...
Friday, 06 January 12
CLARIDEN GLOBAL BRINGS YOU INDONESIA MINING 2012
Capitalizing Business & Investment Opportunities in an Uncertain Market.Press Release - Clariden Global brings you Indonesia Mining 2012, the dedi ...
Friday, 06 January 12
THE PANAMAX MARKET EXPERIENCED A SLOW START TO 2012 - FEARNLEYS AS
Handy
As usual after a holiday owners and charterers both try to get a feel of the market. An Armada of Supras were talking to ballast towards USG, ...
Thursday, 05 January 12
DRY BULK MARKET TAKES A PLUNGE OF LOW ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected the first days of the new year are characterized by significantly low chartering across the board of the dry bulk market, pus ...
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- Kapuas Tunggal Persada - Indonesia
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- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Australian Coal Association
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
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- Minerals Council of Australia
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- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
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- Economic Council, Georgia
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- Australian Commodity Traders Exchange
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- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
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- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
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- MS Steel International - UAE
- Commonwealth Bank - Australia
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- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
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- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
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- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
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- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
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- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
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- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
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- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
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- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
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- Parliament of New Zealand
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- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
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- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
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- Videocon Industries ltd - India
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- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
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- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
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- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
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- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- White Energy Company Limited
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
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- GAC Shipping (India) Pvt Ltd
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