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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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Friday, 10 February 12
TONNAGE KEEPS ON COMING - DREWRY
Drewry Maritime Research’s latest edition of its Dry Bulk Forecaster pulls no punches in its assessment of a market that looks certain to cont ...
Friday, 10 February 12
GIVE PERMIT POWERS TO GOVERNORS: MINERS - THE JAKARTA POST
The Jakarta Post reported that, following clashes between mining companies and local residents, the Indonesian Mining Association (IMA) wants to tra ...
Thursday, 09 February 12
AUSTRALIA'S EPIC TO ACQUIRE 15,500 HA COAL EXPLORATION LICENCES IN EAST KALIMANTAN, INDONESIA
COALspot.com - Epic Resources Limited to acquire two coal concessions in Kutai Barat regency, East Kalimantan, Indonesia.
According to company's ...
Thursday, 09 February 12
RESOURCE ALAM BUYS 28,521HA CONCESSIONS - INSIDER STORIES
Insider Stories reported that, PT Resource Alam Indonesia Tbk (KKGI), owned by Adijanto family, today announced acquisition of 75% interest in PT Ka ...
Tuesday, 07 February 12
DRY BULK MARKET FINALLY STOPS DECLINE, POSTS FIRST RISE IN MORE THAN A MONTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After falling to near record lows, not seen since the mid-80s the dry bulk market has finally stopped its path to "hell", with the industr ...
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- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
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