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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Wednesday, 04 January 12
NEWBUILDING ORDERS PICKED UP IN 2011, BUT 2012 EXPECTED TO BE A DIFFERENT STORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) starting the year on a sour note, losing 114 points and ending yesterday’s session, the first of the new year, ...
Wednesday, 04 January 12
MAHAGENCO TO IMPORT LOW MOISTURE COAL
COALspot.com - Maharashtra State Power Generation Co. Ltd. is the state power generation utility owned by Government of Maharashtra, intends to proc ...
Tuesday, 03 January 12
INDONESIA COAL REFERENCE PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has sets the January 2012 coal reference price at US$ 109.29 per ton or US$ 3.3 ...
Tuesday, 03 January 12
WHICH WAY WILL THE DRY BULK MARKET HEAD ON FIRST WEEK OF THE YEAR? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Dry bulk ship owners will be wondering which way will the BDI (Baltic Dry Index), the industry’s benchmark, will head during the first days of ...
Monday, 02 January 12
THE PROMISE OF INDIA: A BRIEF INTERRUPTION? - CLARKSONS / HELLENIC SHIPPING
Future growth in Indian seaborne coal imports has sometimes been considered as one of the largest potential upsides in the currently oversupplied dr ...
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- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Australian Coal Association
- VISA Power Limited - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
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