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Monday, 12 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 The first days of March appear to be more encouraging for dry bulk operators, but the outlook is still gloomy for the rest of year with earnings for large sized vessels, capesizes floating below breakeven levels. The Baltic Dry Index records daily gains for eleven consecutive days, closing on Friday March 9th at 824 points, up by 6.8% on a weekly basis and up by 17% from February 23rd. All vessel categories experienced positive upturn apart from capesizes with supramaxes being the star performers of this week. The Baltic Supramax Index posted a 16% week-on-week increase in contrast with a 5% rise in the panamax and 7% in the handysize segment. Capesize vessel earnings remain downsized with industry players expecting a stronger Chinese steel production in March -April period and massive destocking of iron ore at major ports that will create more cargo loadings and lift earnings, at least near to $10,000/day.
The sentiment in China’s daily steel output has improved in February at 1,93 million tones, up from 1.83 million tons in January and 1.6827 million tons in December, as mills began ramping up operations ahead of a predicted recovery in demand in March and April. The figures of February are considerably higher than the estimates issued by China Iron and Steel Association, which calculated daily crude steel output at less than 1,7 million tones in February. Traders have said that recent destocking activity indicates further improvements in the market over the coming weeks. We may not see an immediate and rapid rise in steel output, but destocking is going on increasingly, so I am optimistic about steel prices because supply hasn't grown much”, said a trader based in Beijing. "Some new construction sites in northern Chinese regions have not started due to the cold snap, but once these new projects begin, it will provide a big lift for steel demand," he said, adding that he expected prices to keep rising until the end of April. China's industry ministry said China's crude steel output was expected to rise 7 percent to 730 million tons this year, after growing 8.9% last year. However, some steel mills have predicted that real demand could remain flat in 2012, and they warn of further losses over the course of the year as they try to overcome longstanding overcapacity issues.
Capesizes, which typically transport 150,000 ton cargoes of iron ore and coal, are currently earning $5,786/day, less than handysizes that earn more than $6,000 daily with the BCI loosing 22 points, down by 1.4% on a weekly basis and standing at 1503 points. Vale has completed its first VLOC transshipment of iron ore, which could drive more capesize tonnage requirements but the impact will be minor given the glut of ships. The long list of available ships for prompt employment continues to weigh heavily on the market with ships struggling to find cargo, especially in the Atlantic market. After a couple of weeks at $7.90, Rio Tinto shaved 10 cents off the rate for a March 21 onwards 160,000-tonne cargo from Dampier to China.
Panamax and supramax units continue to show stronger performance against capesize on the back of a firmer amount of global grain and coal fixtures activity. However, there are always exogenous threats on the prosperity with Indonesian National Shipowners Association, following China’s example, urging the government to pass the Domestic Transporter Obligation, which could mandate that 30% of all Indonesian coal shipments to be shipped on vessels owned by Indonesian shipping companies. According to Indonesian National Shipowners Association, foreign shipowners earned $14.4 billion in 2011 from exporting Indonesian coal with Indonesian shipowners wishing to receive a large share of this earned capital.
Panamaxes are currently earning $7,129/day with the BPI moving 45 points upward, 5.3% up on a weekly basis. The focus remains on east coast South America, with increased grain cargoes particularly for first half April sparking a rise in rates. A 1996-built 73,000 tonner agreed $15,750 daily plus a $575,000 bonus for the run east. Ships from the Continent and Mediterranean, as well as the Indian Ocean and south East Asia, eyed the South American market.
In the supramax market, vessels, which carry about 25 percent less than panamaxes, are the star performers during the first days of March by earning about $9,000/day with the BSI standing at 864 points, up by 16% on a weekly basis. However, supramaxes were getting more than $15,000/day last year, up by 77% from the current levels and 45% higher levels than capesizes. Rates in the Atlantic finally improved after the Far Eastern markets had been leading the way for quite some time. In the East, the south-east Asia mineral trades continued to absorb plenty of tonnage and the market consequently maintained a firming trend.
Handysize vessels, for three consecutive weeks have shown firmer returns with the BHSI standing at 469 points, a 7% week-on-week increase, and earnings rising to $7,106/day, but still 35% lower than last year’s levels.
The glut of new ship deliveries and the weak sentiment in China’s steel market are serious factors with a negative impact on the healthy performance of the capesize segment, which is the main driver lying behind the positive incline of the Baltic Dry Index, above the psychological barrier of 1,000 points mark.
China’s announcement to lower its 2012 growth target to 7.5% after 7 consecutive years darkens the outlook of dry bulk shipping industry with insiders expecting a prolong of the shipping crisis. Moody’s Investor Service said that the global shipping slump is expected to stay till 2013, while growing credit squeeze will challenge even the toughest shipping companies. Rio Tinto PLC's (RIO) iron ore chief executive, Sam Walsh, said that he expects China to remain a key driver of iron ore demand growth, despite recent signs for a slow growth in Chinese economy. China is "resilient," Walsh said, as it is equipped to underline its growth with fiscal and monetary changes and has increasing rates of household and corporate savings.
The country's crude steel consumption is forecasted to be around 1 billion metric tons by 2020, representing just under half of forecast world consumption, he noted. Rio Tinto is planning to invest $2 billion in Indian iron ore mining in Keonjhar district in the Indian federal state of Orissa. Mr. Walsh said that his company intends to raise production in Orissa to 15m tonnes per year “quickly” and at least some of the ore would be sold overseas, enabling shipowners to benefit from increased export demand.
The first quarter of 2012 is near to end and the trends seem to be negative for capesize with a sense of stability in the panamax and a firm growth of earnings in the supramax and handysize segment. The BDI is 18% lower than the 1,000 points mark and the solid performance of supramax vessels may boost the index at higher levels before the end of March.
Source: Maria Bertzeletou, Hellenic Shipping
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Thursday, 15 March 12
RESOURCE ALAM FY11 PROFIT UP 171% - INSIDER STORIES
Insider Stories reported that, coal mining company PT Resource Alam Indonesia Tbk (KKGI) reported a 171.16% jump in net profit last year on the back ...
Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
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- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Parliament of New Zealand
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
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