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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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Thursday, 29 March 12
DRY BULK EDGED FURTHER UP, ON HEALTHY DEMAND FOR MOST SHIP TYPES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With capesize vessels finally reappearing in demand, the dry bulk market had an easier task of rising yesterday, as the BDI (Baltic Dry Index) reach ...
Thursday, 29 March 12
ADARO FY11 NET INCOME JUMPS 124% - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) today announced a 124% jump in net income to US$552 million last year or US$0.017 a share. ...
Wednesday, 28 March 12
CUESTA HAS RECEIVED APPLICATIONS AND FIRM BIDS IN EXCESS OF $9 MILLION FOR THE COMPANYS IPO
COALspot.com - The Directors of Cuesta Coal Limited (ASX:CQC) have announced that today it has received applications and firm bids in excess of $9 m ...
Wednesday, 28 March 12
ORPHEUS ENERGY TO COMMENCE JORC DRILLING AT ADK PROJECT
COALspot.com - Indonesian coal explorer and producer, Orpheus Energy (ASX:OEG), have today announced that the company is about to commence a drillin ...
Tuesday, 27 March 12
DRY BULK MARKET KEEP RISING FOLLOWING THE SAME TREND OF LAST WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept its upward momentum this week, on the same reasons of those last week. That is, the smaller ship types are still on the ris ...
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- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
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