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Monday, 27 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 The pessimism in the dry market persists with the Baltic Dry Index still trying to find a steady pace of growth and average time charter earnings for all vessel classes floating at significantly lower levels than 2011. The steel market fundamentals have brought very low earnings for all dry bulk carrier vessels, even for smaller ones handies/supras, which were outperforming last year when capesizes and panamaxes were suffering. There are still hopes for improvement in March and onwards since January and February are seasonally weak months with Chinese buying less iron ore due to National Festivities and hefty stockpiles. Inventories at key Chinese steel mills monitored by China’s Iron & Steel Association reached 10.98 million tones by the end of January, the highest since the second half of 2009 and rising 24.5% from early January. CISA said in its monthly Report that it will be difficult for demand to improve significantly during end February to early March and inventories are likely to continue rising.
The world crude steel production for the 59 countries reporting to the World Steel Association was 117 million tonnes (Mt) in January 2012. This is -7.8% lower than January 2011. China’s crude steel production for January 2012 was 52.1 Mt, a decrease of -13% compared to January 2011. Elsewhere in Asia, Japan produced 8.6 Mt of crude steel in January 2012, a decrease of -10.6% compared to the same month last year. South Korea’s crude steel production for January 2012 was 5.1 Mt, -9.6% down compared to January 2011.
Despite the BDI lost again ground by falling every day during last week it finally ended to close in green with an improvement on Friday by earning 12 points from Thursday’s closing. The BDI closed at 717 points by gaining only 1 point from previous week’s closing of 718 points. Overall, all Baltic Dry Indices closed on green apart from panamaxes. There was an upturn in the capesize segment, a downward trend for panamax and a stronger performance in the supramax and handysize segments. The handysize segment showed the largest increase by gaining 16 points from last week, up 4.2% and ending at 395 points with vessel earnings near to $5,900/day in contrast with a 12% decline in the Baltic Panamax Index by loosing 113 points on a weekly basis and ending at 836 points. The BPI has surpassed the 1,000 points mark in mid February, by standing at 1018 points on February 14th, a yearly high level.
For large size vessels, capesizes, which typically transport 150,000 ton cargoes of iron ore and coal, the BCI ended by gaining 43 points on a weekly basis, up by 2.94% standing at 1504 points with a significant bounce back on Friday. Capesize earnings rose to $5,699/day from the yearly low of $5,158 on February 21st with China boosting its cargo demand loadings from Brazil and Australia. According to a London based analyst at derivatives broker Freight Investor Services Ltd there has been clearly some Chinese buying at these low freight levels that is sufficient to move rates up slightly. Prices (TSIPIO62) for iron ore imported into the Chinese city of Tianjin increased for a fifth session, gaining 0.2 percent to $139 a metric ton, according to figures from the Steel Index Ltd.
Spot prices of imported iron ore in China rose on Friday as traders bid up the market, betting on a recovery in domestic steel demand when construction projects resume next month. According to traders, global miner BHP Billiton sold several cargoes this week at prices around $3 more than previous deals. Australian Pilbara iron ore fines with 61.5 percent iron content was quoted at $138-$140 a tonne, cost and freight, up $2 from Thursday, according to Chinese consultancy Umetal. “Some traders are trying to push up the price because they think steel demand would pick up in March when the weather returns better and construction activity resumes in China”, he said. BHP rivals Rio Tinto and Vale were also offering more cargoes on Friday. Iron ore with a 62% content rose 2.1% to $138.70 per tonne on Thursday, its biggest percentage gain since December 21st, according to Steel Index price provider.
Panamax vessels, which usually transport 60,000-70,000 tonne cargoes of coal and grain, experienced severe decline with earnings falling below $7,000/day, when last year were earning around $14,000/day, and the BPI loosing 113 points from last week’s closing, down by 12% and standing at 836 points. The segment is feeling the pain from overcapacity with at least one panamax, kamsarmax or post panamax being delivered into service every day so far this year. Owners in the Atlantic are said to subsidizing their operating expenses as they are not earning enough to cover the cost of bunkers on ballast legs. With all February grain cargoes from east coast South America fixed to ships earlier this month, the vessels being booked at the moment for March loading dates are almost exclusive those ballasting from the Pacific markets.
Supramax vessels, which carry about 25 percent less than Panamaxes, showed healthier levels from a distressed Atlantic status with earnings rising near to panamax levels of about $6,900/day and the BSI gaining 21 points, up by 3.2% from last week’s closing and standing at 662 points. In addition, handysize units gained a sharp increase of 4.2% with the BHSI standing at 395 with earnings rising to $5,980/day, almost 40% lower than previous year when they earning near to $10,000/day.
Even the positive upturn seen during the last week in the freight markets there is still a road ahead for full recovery since the vessels’ glut is still a major threat for the dry bulk market and Chinese iron ore import market sentiment remains fragile with spot iron ore prices dropping on the increase of port stockpiles. The benchmark iron ore price trading was at $140/tonne in recent months from a record high of $180/tonne seen last year. The chief executive officer of Rio Tinto, the second largest supplier of iron ore, sees a period of volatility of six months for the iron ore market before stabilizing.
The steel needs from China and other developing countries are expected to ensure strong commodity demand on the long term, he added. "The world is an uncertain place at the moment and we have seen some softness in China, but demand remains strong," he said.
China alone will require at least another 100 million metric tons of iron ore a year for the next eight years, including 600 million tons in that period to satisfy growth and 200 million to replace the expected exit of high-cost supplies, he said, adding that Rio plans to contribute about a quarter of this additional ore to China.
The move of China to cut banks’ reserve requirements ratio by 0.5% to be effective from February 24th and Vale’s decision to move to spot iron ore pricing may be two positive key developments for the future of dry bulk earnings. Vale has announced that it will sell 80% of its iron ore at spot market pricing, which satisfies Chinese steelmakers by gaining from falling iron ore prices. February has almost ended and BDI has not still managed to break the psychological barrier of 1,000 points mark with earnings for capesize vessels trading at similar levels with handysizes. March may be a healthier month for large size units as Chinese iron ore stockpiles has shown a sense of retreat during the last days of February, by falling less than the record high of 100 mil tones seen almost two weeks ago, and a boosted Chinese cargo buying demand that increased capesize loadings from Australia and Brazil.
Source: Maria Bertzeletou, Hellenic Shipping
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Monday, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- White Energy Company Limited
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
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