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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, 05 December 11
SGX LAUNCHED IHS MCCLOSKEY/XINHUA INFOLINK OTC CFR SOUTH CHINA COAL CONTRACT TODAY
COALspot.com - In order to meet the demand of the coal industry for an effective coal hedging tool with counterparty credit risk mitigation facility ...
Monday, 05 December 11
DRY BULK RATES LOOKING TO EXTEND GAINS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize dry bulk carrier owners have had a great week, with rates rising for six straight sessions (including the end of the week before that). As ...
Sunday, 04 December 11
SUPRAMAX TRIPS VIA INDONESIA WERE REPORTED AROUND $ 7500 - 8000 PD
COALspot.com - The BDI and Cape index recovered this week. The BDI was up by 3.26 pct and Cape index saw a big jump and closed at 3409 points (up by ...
Saturday, 03 December 11
BORNEO TO SPEND US$600 MIO CAPEX - INSIDER STORIES
Insider Stories reported that, Coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN) plans to spend US$600 million capital expenditure ( ...
Friday, 02 December 11
DRY BULK CARRIERS BACK IN THE SPOTLIGHT AS MARKET SPEEDS UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the tanker and container markets suffering dearly, it seems that the tide has once again turned in favor of the dry bulk carriers, despite over ...
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- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- The Treasury - Australian Government
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
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