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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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Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
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 ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
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- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Australian Coal Association
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
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