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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, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- The University of Queensland
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
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