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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, 27 December 11
MINERS MAKE CASE FOR RESUMING CONTRACT NEGOTIATIONS - THE JAKARTA POST
The Jakarta Post reported that, problems with the renegotiation of mining contracts in the country are far from over, as agreements on several cruci ...
Tuesday, 27 December 11
COAL SHIPMENT OF TIANJIN PORT REACHED 6.72 MLN TONNES IN NOVEMBER - STEEL HOME / HELLENIC SHIPPING
Tianjin port shipped 6.72 million tonnes of coal in November, decreasing 600,000 tonnes versus 7.32 million tonnes in October, while up 21.09% or 1. ...
Tuesday, 27 December 11
NEW CLAUSE PUBLISHED FOR SLOW STEAMING - BIMCO
Many owners and operators faced with high bunker prices are considering implementing slow steaming regimes to save fuel and to assist with capacity ...
Monday, 26 December 11
NEW EXPORT TAX PLAN GREETED WITH PRAISE AND CRITICISM - THE JAKARTA POST
The Jakarta Post, one of the Indonesia's leading english news paper reported that, both praise and criticism showered the government’s plan t ...
Sunday, 25 December 11
THERMAL COAL PRICES GAINED UP TO 4.32 PERCENT
COALspot.com - globalCOAL index gained 4.32 percent to US$106.36 per ton in RBCT, benchmark for South Asia and West Europe markets, for the week end ...
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- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
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