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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, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
Monday, 12 March 12
DELTA DUNIA 1M OVERBURDEN DROPS 3.1% - INSIDER STORIES
Insider Stories reported that, Indonesia's second largest coal mining contractor PT Delta Dunia Makmur Tbk (DOID) reported a 25 million bank ...
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- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
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