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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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Saturday, 12 November 11
DRY BULK MARKET REGAINS SOME OF THE LOST GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market managed to edge forward yesterday, putting an end and halting the losses accumulated over the course of the past weeks, which ha ...
Friday, 11 November 11
PETROCOM ENERGY PLANS $40M TO BUILD COAL PLANT IN CILEGON - JP
The Jakarta Post reported that, Hong Kong-based Petrocom Energy Ltd has unveiled plans to invest up to US$40 million on a proposed coal-blending fac ...
Friday, 11 November 11
GOVT WAITS LEGAL DECISION ON BUKIT ASAM, ADARO DISPUTE - JP
The Jakarta Post reported that, The government says that it will not interfere in the settlement process of the dispute between state coal miner PT ...
Thursday, 10 November 11
INDONESIAN REFERENCE COAL PRICE FELL AGAIN
COALspot.com - Ministry of Energy and Mineral Resources of Indonesia has set the November 2011 Indonesian Coal Reference Price for thermal coal at U ...
Tuesday, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
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- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Australian Coal Association
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Indogreen Group - Indonesia
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