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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, 08 May 12
DRY BULK MARKET LOOKING FOR NEW DIRECTION THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the BDI (Baltic Dry Index) the main benchmark of the dry bulk shipping industry not traded at the start of this week, traders, charterers and s ...
Monday, 07 May 12
INDONESIAN HBA FALL AGAIN IN MAY 2012
COALspot.com - Indonesian HBA fall again to lowest level since January 2011 in May 2012. The monthly coal reference price for coal sales in Ma ...
Sunday, 06 May 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA SWAPS SLIGHTLY DROP THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries slightly dropped this week.
According ...
Sunday, 06 May 12
S7 & S8 ROUTES LIKELY TO BE FIRM NEXT WEEK VISTAAR SINGAPORE
COALspot.com - The BDI remained flat this week and was up just by 1 point closing at 1,157 points.
The cape size index was up by 5.14 pct closing ...
Sunday, 06 May 12
EXPORT DUTY ON MINERAL FINALLY TO BECOME EFFECTIVE NEXT WEEK
COALspot.com - Mineral ore exporters of Indonesia ( only IUP holders) are required to obtain recommendation letter from the energy and mineral ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Australian Coal Association
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
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