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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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- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- ASAPP Information Group - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- VISA Power Limited - India
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
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