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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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- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Australian Coal Association
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
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