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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, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- The University of Queensland
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
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