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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, 01 January 12
IS INDIA FOLLOWING INDONESIA TO STANDARDIZE COAL PRICES TO GET MAXIMUM BENEFITS?
COALspot.com - Coal India limited, an Indian state owned and world largest coal producer has introduced gross calorific value (GCV) based pricing me ...
Saturday, 31 December 11
GLOBALCOAL NEWC INDEX SURGED 2.32 PERCENT
COALspot.com - globalCOAL index in Newcastle Port, benchmark for Asian market, ended substantially higher, surged 2.32 percent to US$115.47 per ...
Saturday, 31 December 11
BORNEO LUMBUNG TO BUY BUMI STAKE, SWAP CEO - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading english news paper in Indonesia reported yesterday, shareholders of Indonesian coking coal miner Borneo Lumbun ...
Friday, 30 December 11
CENTRAL GOVERNMENT SHOULD ISSUE PERMITS - THE JAKARTA POST
The Jakarta Post reported that, business associations from both the palm oil and mining sectors have suggested that the central government should re ...
Thursday, 29 December 11
NEW VESSELS DELIVERED ARE FLOODING THE OCEANS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected 2011 has been the year that newbuilding deliveries peaked and kept "flooding" the market, thus supressing freight rates and er ...
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- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- White Energy Company Limited
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Australian Coal Association
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
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