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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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Monday, 12 December 11
DRY BULK MARKET LOOKING FOR BALANCE AS WE ENTER 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
During the past few months, freight rates for dry bulk carriers, especially Capesizes have increased significantly, providing ship owners with a muc ...
Sunday, 11 December 11
THE PANAMAX INDEX ENDED ON POSITIVE DIRECTION - VISTAAR
COALspot.com - The BDI and Cape index continued the upward trend this week also with BDI up by 3.00 pct closing at 1,922 points and Cape index up by ...
Saturday, 10 December 11
MAHAKAM RIVER RESUMES COAL TRANSPORTATION
COALspot.com - East Kalimantan local government has resumed limited coal barging through Mahakam River after two weeks of suspension following the c ...
Friday, 09 December 11
DRY BULK MARKET REBOUNDS ON HEALTHIER DEMAND OUTLOOK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged forward yesterday, at the highest rate of the past couple of weeks, as a result of stonger iron ore demand, backed by lowe ...
Thursday, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
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- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Economic Council, Georgia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
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