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Monday, 05 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 An air of optimism poured in the market this week for dry bulk shippers with the Baltic Dry Index recording daily gains during the end of February by rising for the seventh straight day and closing at 771 points, up by 53 points or 7.38% from last Friday’s closing. All the indexes reflecting daily freight market rates for capesize, panamax, supramax and handysize dry bulk vessels closed in green with smaller sized vessels, supramax and handysize, showing the largest week-on-week increase, 12.54% and 10.63% respectively in contrast with a 1.40% and 0.96% rise for capesize and panamax vessels respectively. There are increasing doubts if this recent euphoria will stay since there are many newbuildings on stream and panamax ship operators are already experiencing severe pains from continuous deliveries with gloomy predictions for China’s economic growth, the main demand driver for raw materials’ transportation.
For large sized vessels, capesizes, which typically transport 150,000 ton cargoes of iron ore and coal, the market remains largely flat with the BCI gaining 21 points on a weekly basis, up by 1.4% standing at 1525 points, whereas average daily earnings are floating at levels below those for handysize units, less than $6,000/day. The over abundance of ships and the limited inquiry in the Atlantic market persist to distress capesize operators’ financial performance with earnings below breakeven levels. Spot and period chartering activity is piecemeal with a vessel of 150,000 tons rumored to have been fixed for an east coast Australian round at $7,000/day. In the period market, a 169,000 tons vessel is said to have booked from China for 4 to 7 months at $12,300/daily.
The capesize segment is still very fragile as Chinese have not fully regained their iron ore buying appetite with hefty iron ore inventories. Chinese steel production has found a small amount of support but remains relative low. The China Iron & Steel Association reported that daily crude steel production averaged approximately 1,71 million tons from February 1 to February 10. This is an increase of 2% from the 1,67mt average daily steel production occurred during January 21 to January 31, but down significantly from last year’s record 2,02mt average daily production during June 21 to June 30. Spot iron ore prices are on rise, near to $140/tonne, on a rebound of Chinese demand ahead of construction projects restarts in March. Estimations for a decline in Chinese iron ore imports for 2012 would be a highly negative development for capesize earnings. According to China Mining Association, China may import as much as 14% less of the steelmaking raw material this year as domestic production increases. Imports may be between 590 million metric tons and 650 million tons this year, while last year’s imports were 686 million tons, according to Bloomberg calculations based on General Customs data.
The panamax market appears to be in a better condition as China’s coal demand appears more supportive and average daily earnings are above $6,500, when last year vessels were earning more than doubled. Panamax operators are also facing serious issues from vessel oversupply and strong South American grain demand adds a beneficiary key factor for the healthy performance of earnings. There was said to be a healthy list of cargoes, but rates have hardly moved as charterers could pick from ships coming from the Continent, Mediterranean, the Indian Ocean and Southeast Asia. The BPI gained only 8 points from last week’s closing, up by 0.96% and standing at 844 points.
China’s thermal coal market has shown weakness amid expectations for an upward movement in March that drags vessels earnings below $10,000/day. With coal stocks remaining high at both Chinese power plants and coal ports, a Beijing-based trader said the Chinese coal market is likely to remain slack for the next couple of weeks. Coal stocks at China's key power plants totaled 74.45 million mt on February 20, able to last for about 20 days of burning, according to figures from the National Development and Reform Commission. However, the recent drops in coal stocks at coastal ports, together with the month-long overhaul of the Datong-Qinhuangdao railroad rumored to be starting in mid-March, may end the weakness in China's coal market, market sources said. Fangcheng Port in southern China's Guangxi Zhuang Autonomous Region is reported to be holding slightly over 6 million mt of coal and incoming coal vessels have to wait for about a week before they can be unloaded. "Not only Fangcheng Port, other major coal ports also see their stockyards packed," a Shandong-based trader said.
Supramax vessels, which carry about 25 percent less than panamaxes, showed the strongest performance this week with the BSI gaining 83 points, up by 12.5% from last week’s closing and standing at 745 points. Average daily earnings are above $7,700, but 50% lower than last year with the Atlantic market still being distressed. In the Pacific, the south-east Asia mineral trades, including a significant amount of nickel ore business, has been driving the recent improvement. A vessel of 55,000dwt built 2005 is said to have been fixed for a trip via Indonesia to India at $14,500 daily.
In addition, handysize units gained for a second consecutive week a sharp increase of 10.6% with the BHSI standing at 437and earnings rising to $6,630/day, almost 37% lower than previous year when they were earning $10,481/day.
The weak performance of capesize segment troubles the dry bulk industry with the BDI crawling to move at levels of one year ago and break the barrier of 1,000 points. China, the world’s second largest economy and the largest importer of iron ore and coal, has shown signs of negative economic growth with the World Bank estimating that China’s GDP annual growth will decline to 5.9% by 2021 after three decades of 10% average annual growth. The critical issue is if China would be the massive buying power for dry bulk materials, in the forthcoming years, to support and absorb the ample tonnage of ships in the market. A negative catalyst factor is China’s target to achieve iron ore self efficiency. According to the China Iron & Steel Association, China is aiming to improve its self efficiency in iron ore and continue to consolidate the steel industry in a bid to raise the output of its major steel makers by 10% within the next four years. The government expects the country’s top 10 steel manufacturers to account for 60% of the country’s steel output by 2015, Wang Xiaoqi, CISA vice chairman, said at a trade conference held in Beijing.
However, players haven’t lost their shipping confidence with mounting hopes for a firmer return of the market after the end of the first quarter of the year as Chinese steel mills are restocking on iron ore and they slowly increase steel output during the seasonally busy periods of March and April for the construction and manufacturing sectors.
Source: Maria Bertzeletou, Hellenic Shipping
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Monday, 05 March 12
SOUTHGOBI ANNOUNCES AGREEMENT TO SELL ITS THERMAL COAL TSAGAAN TOLGOI DEPOSIT FOR US$ 30 MILLION
SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) announced today an agreement to sell its thermal coal property, the Tsagaan Tolgoi Deposit to Modun Re ...
Monday, 05 March 12
SOME RESOURCE TITANS NOT THRILLED WITH INDONESIAN EXPORT BAN - THE JAKARTA GLOBE
The Jakarta Globe reported that, local representatives of major business associations in East Kalimantan have protested a government regulation that ...
Sunday, 04 March 12
SE ASIA WAS FIRM FOR TRIPS TO INDIA AND CHINA - VISTAAR
COALspot.com - This week saw another upward trend with all indices up and generally market was firm.
The BDI was up by 7.38 pct closing at 771 po ...
Friday, 02 March 12
DJMBP HAS ANNOUNCED SECOND BATCH OF CLEAR N CLEAN CERTIFIED MINERS
COALspot.com - The Directorate general of mineral & coal of Indonesia has announced second batch of companies who have passed IUP Clear and Clea ...
Thursday, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
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- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- MS Steel International - UAE
- The University of Queensland
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
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