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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, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
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- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Australian Coal Association
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- The University of Queensland
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
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