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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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Thursday, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
Monday, 27 February 12
INDONESIAN COAL EXPORTS TO CHINA DROPS 39.76 PERCENT IN JANUARY 2012
COALspot.com: Indonesia, the world largest coal exporter, shipped 28.21* mln mt of coal in January 2012, slightly lower than its December 2011 ...
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- Africa Commodities Group - South Africa
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Bangladesh Power Developement Board
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Minerals Council of Australia
- Thai Mozambique Logistica
- Aditya Birla Group - India
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
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