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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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Wednesday, 18 April 12
INDONESIA TO INTRODUCE EXPORT DUTY ON MINERAL ORES BY 6 MAY 2012
The Indonesian government is scheduled to issue regulation on export duty for minerals before May 6, 2012.
According to Bisnis Indonesia, as quot ...
Sunday, 15 April 12
THE SPOT FIXTURE RATES FOR SUPRAMAX IN SE ASIA SAW SOME SOFTENING OF CHARTER RATES - VISTAAR
COALspot.com - The market seem to be holding and except for Supramax and handy size index all other index was up with BDI up by 4.74 pct closing at ...
Friday, 13 April 12
MINERS OPPOSE GOVTS EXPORT TAX PLAN - THE JAKARTA POST
The Jakarta Post reported that, Indonesian mining companies have strongly protested the government’s plan to impose a 25 percent export tax on ...
Friday, 13 April 12
S&P CAUTIONS AGAINST NEW INDONESIAN MINING REGULATIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Investors may have expressed concerns about looming new mining regulations, but ratings agency Standard & Poor& ...
Thursday, 12 April 12
FIRST QUARTER OF 2012 SAW AN ADDITIONAL 24.2 MILLION DWT OF DRY BULK CARRIERS ENTERING THE FLEET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The inflow of newbuilt dry bulk vessels was larger than expected in the first quarter of 2012. As much as 24.2 million DWT were added to the fleet. ...
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- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Planning Commission, India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Australian Coal Association
- Jindal Steel & Power Ltd - India
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