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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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Wednesday, 16 November 11
A STRONG WEEK FOR THE CAPES - BRS
A sharp bounce by the Cape market pushed the BDI up by 3% last week. This was despite a softening in the other indices with the Panamax, Supramax an ...
Monday, 14 November 11
BORL SEEKS 660K MT OF LOW SULPHUR COAL
COALspot.com - BORL India has issued a tender for around 660,000 MT of 4500 - 5500 kcal/kg sub-bituminous Coal.
Bharat Oman Refineries Ltd ...
Sunday, 13 November 11
BUNKER PRICES REMAINED FIRM
COALspot.com - The market seemed to recover this week with the BDI and Cape Index up.
The BDI was up by only about 2.86 pct closing at 1835 point ...
Saturday, 12 November 11
COALINDO ENERGY LAUNCHED INDEX FOR 3400 GAR COAL
COALspot.com - PT Coalindo Energy, in cooperation with Argus Media Limited, launched the coal index for low-rank coal with a calorific value of 3,40 ...
Saturday, 12 November 11
BBJ WILL RELEASE A COAL CONTRACT
Jakarta Futures Exchange will soon release a coal futures contracts during the quarter 1 / 2012.
Director of the Jakarta Futures Exchange (BBJ) S ...
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- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Parliament of New Zealand
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- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
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- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
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- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
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- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
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