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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, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
Wednesday, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
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- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Central Electricity Authority - India
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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