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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, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- PTC India Limited - India
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Australian Coal Association
- Coal and Oil Company - UAE
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
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