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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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Friday, 04 May 12
DEMOLITION KEY FOR DRY BULK MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The overflow of newbuilding vessels which “spilled over” into 2012 from 2011 brought the dry bulk market to a near collapse level at the ...
Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
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- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
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