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Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a positive note for the dry bulk shipping environment. The capesize segment is still distrustful, but industry players are seeing in a stronger Chinese iron ore demand as we move towards April and Chinese steel mills are resuming their production. According to data from the China Iron Ore & Steel Association, China’s crude steel output rose 1.1% in the second ten days of March, 11-20, from the preceding period, standing at 1,919 million tones from 1,898 million tones in the previous ten days.
Brazil’s Vale, the world’s second largest mining company, shares the same view with its Australian rivals, Rio Tinto and BHP Billiton for a moderate Chinese iron ore demand holding an optimistic position given the large steel production capacity of China. Vale forecasts that steel output in China will grow 5% this year after expanding more than 10% a year ago. One more positive sign is that Chinese February iron ore imports improved, after a weak January, totaled 65.0mt, up 10% m-o-m and 33% y-o-y, while Chinese iron ore inventories are falling for a second consecutive week to less than 100million tons.
In terms of vessels earnings, supramax and panamax segment show a stronger picture than capesizes, whose average time charter earnings are still floating below $5,500/day. Strong South American grain demand and an increase in coal exports from U.S. and Europe provide a firmer support in the panamax market with earnings almost 40% more than capesize vessels, while supramax vessels are trading at levels 108% higher than capesize and 28% than panamax earnings. However, heavy rains in Eastern Australia led to a temporary operating suspension at several coal mines resulting in slower Australian coal fixture volumes that may have an impact on the vessel earnings of smaller vessel sizes, panamax and supramax.
During the last week of March the BDI ended again in green, following its constant small rise from February 10th, by gaining at an average 36 points per week, and standing one breath from breaking the psychological barrier of 1,000 points mark
The index closed on Friday 30th March, at 934 points, down by 2.4% from last week’s closing and down by 39% from a similar week closing in 2011 when it was 1,520 points. The BSI showed a soft decline of 0.48% after 5 weeks of consecutive gains, while the BCI posted the strongest performance this week with a 3% rise. The BCI gained 43 points by closing at 1412 with vessels earnings rising to $5,188/day, $3,384/day less than handysizes, showing an increase of $642/day on a weekly basis. At similar week in 2011, capesizes were earning $10,554/day, when supramax and panamax average time charter earnings are floating at levels more than $15,000/day.
In the panamax segment, the BPI rose to 1051 points from 1036 last week, 1,45% up, with vessel earnings still floating at levels below $9,000/day, while supramax vessels persist to show the most solid performance with earnings more than $10,000/day. Handysize units are trading at levels similar with panamax by earning $8,572/day, when at similar week in 2011 handysize vessels were earning more than $11,000/day.
The last week of March ends with some interesting news that reshapes the dry bulk shipping environment. Brazil’s Vale senior executive stated in Reuters that it expects to win permission within months to unload its very large ore carriers at Chinese ports, a move that will ensure efficient delivery of raw materials to China’s growing economy. The ships, known as very large ore carriers, or "Valemax" class vessels, are needed to meet soaring demand for iron ore, the main ingredient in steel, Tito Martins, Vale's CFO, said in an interview at the Reuters Global Mining and Metals Summit. China's economy expanded by $2-trillion in the last decade as growth averaged about 11%, he said. In the next decade, he predicted, it will expand by $4- trillion, even if growth slows by more than a third. "Even if they grow at 7%, taking into account the size of the gross domestic production today, this growth in the next five to 10 years will be much bigger than before”, he said.
"A slowdown in China doesn't necessarily mean a recession," Martins said, adding that the steel business has been growing at rates faster than the overall economy. He said that Iron ore prices are likely to remain above $120/ton in the next several years because demand remains strong and at prices below that, Chinese producers of low quality ore begin to lose money. "The $100 to $120 a ton level is a level where many marginal producers start having difficulty. He also mentioned that Vale needs the very large ore carriers to compete with Australian ore producers such as BHP Billiton and Rio Tinto, which are closer to China and pay about half the transport fees to move their product to the world's largest ore market as Brazilian producers do. The first of the 400 000-deadweight-tonne Valemaxes began operating late last year. Vale hopes to build 35 by the end of 2013, at a cost of about $4.2 billion.
One more outstanding of this week's developments was the news for Rio Tinto’s joining in the new trading mechanism launched by the China Beijing International Mining Exchange (CBMX), as a second foreign miner after Australia’s Fortescue Metals Group. "We welcome the development of CBMX as it gives us a new option for selling any available tonnes to China, over and above those already contracted," Rio's iron ore president for Asia, Alan Smith, said in a statement on Friday. Brazilian miner Vale SA also signed a memorandum of understanding with CBMX as it pledged to support the electronic trading platform, the exchange said in a statement. The trading platform, which provides a domestic rival to the Global Ore trading exchange backed by mining giant BHP Billiton , will start official trading on May 8. China, the world's top iron ore buyer,which consumes around 60 percent of global seaborne ore, hopes the exchange will help the country to gain more pricing control and also reduce speculation and manipulation in the spot market. Chinese mills including Baosteel, Hebei Steel, Wuhan Steel, Shougang and Angang as well as large iron ore traders China Minmetals and Sinosteel have joined the new iron ore trading network.
As we move in the second quarter of the year dry bulk freight rates are expected to remain weak as Chinese iron ore inventories are still escalating with some signs for a stronger Chinese iron ore demand from expectations for a rebound in Chinese steel production. Upcoming prospects for thermal coal demand remain very promising with estimations for a surge in thermal coal fixture volume by the end of April due to maintenance in the Daqin railway and a seasonal restocking for peak summer demand season. The dry bulk fleet continues to expand and the shipments of iron ore, a raw material for steel, which account for around a third of seaborne volumes for capesize vessels, will be the main key force along with Chinese steel demand for an upturn of the dry freight market at levels more comforting than the current pessimistic outlook.
Source: Maria Bertzeletou, Hellenic Shipping
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Tuesday, 15 May 12
POTENTIAL BOOM OF CHINAS COAL IMPORTS COULD PROVIDE FURTHER SUPPORT TO DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been moving sideways during the past week with the industry’s benchmark, the Baltic Dry Index (BDI) losing 0.53% on th ...
Saturday, 12 May 12
THE SHIPPING MARKET IS UNLIKELY TO SEE A REBOUND ANYTIME SOON - VISTAAR SINGAPORE
COALspot.com - The BDI softened this week and it was down by 1.64 pct closing at 1,138 points.
The cape index was up by 2.41 pct closing at 1,61 ...
Friday, 11 May 12
POLITICAL CHANGES COULD LEAD TO TEMPORARY HALT IN SHIPPING INVESTMENTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The potential of changes of political leadership in many of the world’s leading economies could very well lead to significant shifts in the di ...
Thursday, 10 May 12
DRY BULK ERRATIC ON LACK OF DIRECTION - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept up its erratic behavior as it went down again during yesterday’s session, on a lack of direct guidance in terms o ...
Wednesday, 09 May 12
COAL INDIA SIGNS FSAS WITH 13 POWER UNITS SO FAR - PTI
Press Trust of India has reported that, coal India has so far entered into fuel supply pacts with 13 power units, including Reliance Power's Rosa P ...
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- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
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