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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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Sunday, 19 February 12
THE SPOT FIXTURE RATES WERE REPORTED AT HIGH LEVELS - VISTAAR
COALspot.com - "The markets seems to holding back this week appears the momentum which picked up last week may slow down" - Capt. Reddy of ...
Sunday, 19 February 12
INDIKA ACQUIRES MULTI TAMBANGJAYA - INSIDER STORIES
Insider Stories reported that, PT Indika Energy Tbk (INDY) announced that wholly-owned subsidiaries have signed a conditional sale and purchase agre ...
Friday, 17 February 12
COLOMBIA COAL PRODUCTION, EXPORTS JUMP IN 2011: GOVT - COLOMBIA REPORTS
Colombia Reports reported that, colombia's coal production jumped 15.4% in 2011 to 85.8 million tonnes versus the previous year while exports rose ...
Thursday, 16 February 12
GEARING UP FOR THE EMERGING OIL & GAS OPPORTUNITIES IN MYANMAR
Press Release - Myanmar Ministry of Energy and Centre for Management Technology (CMT) to Co-host MOGP (Myanmar Oil, Gas & Power) Summit on 28 - ...
Wednesday, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
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- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Australian Coal Association
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- White Energy Company Limited
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
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