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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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Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
Tuesday, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
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- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
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