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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, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the minera ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
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- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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