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Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
 The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to levels near or below operating expenses. The Baltic Dry Index closed at 717 points on Friday of February 17th, gaining only two points more than the previous week’s closing and it is now standing 55 points above from the historical low level in the last 26 years of 662 points on February 1st. The dry market normally shows a plunge at the beginning of every year as Chinese festivities bring a lull in iron ore buying activity with the BDI finding its pace upon the return from holidays. However, the index now seems that struggles to keep a steady pace of growth since it is still below the psychological barrier of 1,000 points and it is unquestionable if would surpass this level till the end of February. Following its positive upward movement in the previous week by gaining 68 points more on a weekly basis and panamaxes being the best performers, the sentiment is again distrustful with capesize earnings being extremely flat and handysizes showing a stronger resilience this week.
The BHSI showed a 3.5% week-on-week increase in contrast with a 1.8% week-on-week fall in the BPI from its 39.5% remarkable increase in the week ending February 10th. Overall, the BDI showed a minimal rise of 0.2% on a weekly basis by falling for the last three consecutive days of the week and ending to loose 12 points from the high of 729 points at the beginning of the week. Average time charter earnings for all vessel sizes are still floating at low levels, below $10,000/day, with increased worries for a prompt revival before the end of the first quarter of the year. Panamax and supramax vessels seem to have a better outlook to break the barrier of $10,000/day by earning ground from a strong Chinese coal demand, while capesizes may suffer for a longer period of time since the Chinese iron ore buying appetite, the main driver for healthier capesize earnings, is still fragile.
For large size vessels, capesizes, the market was extremely flat with the BCI gaining only 4 points more at the end of the week by closing at 1461 points, up by 0.27% on a weekly basis. The Atlantic market remains particular inactive despite some iron ore activity from Western Australia. W Australia/Qingdao rates is said to have improved only slightly, to $7,70/tonne, compared to $7,60/tonne last week. In the panamax market, the week opened with a degree of optimism with the index surpassing the 1,000 points mark level, but by the end of the week it fell to 949 points, loosing 18 points, down 1.86% from previous week’s closing.
The week ended also negative for supramax owners with a retreat of decline in Atlantic supramax rates and a rise in Pacific from record lows. Owners with tonnage in the European side found almost impossible to consider the ballast option at the prevailing freight rates and bunkering expenses, while owners in the East with tonnage seem to have better chance with rates covering operating expenses. Some reasonable mineral business from Indonesia gave a substance in the segment with the BSI loosing only 4 points from previous week’s closing and ending at 641 points, down by 0.6% week-on-week basis.
The current status of China’s steel market and the high levels of iron ore inventories do not currently support massive iron ore imports enough to lift the BDI above 1,000 points and capesize earnings at the levels of more than $10,000 day.
According to Data from the General Administration of Customs, imports by China, the world’s biggest buyer of the steel making ingredient, fell 7.4% to 59,32 million tons in January from a month earlier due to the Lunar New Year holiday. Even January gives a distorted picture for Chinese buying sentiment due to National Festivities; China’s steel market remains sluggish. The China Iron and Steel Association reported that daily crude steel production averaged 1,67 million tons from January 21 to January 31. This is similar with the average daily production that occurred during January 11 to January 20, but is down significantly from last year’s record of 2,02 mt average daily production that occurred during June 21 to June 30.
Furthermore, Chinese iron ore inventories reached the alarming level of nearly 100 million mt by the beginning of February and fell to 99.97 million tons by February 13th, but it is still hefty and indicates the slump in demand for steel production in China. Due to lower demand as a result of the slowing economy and tight liquidity, steel prices have been plunging since last October, leaving steel mills with marginal profits or making losses. Major mill Angang Steel, for instance, announced a net loss of some 2.2 billion yuan for 2011 due to rising raw material costs. CISA Chairman Zhu Jimin said that the possibility of losses and meager profits for steel mills is likely to increase this year as increased costs, falling demand and financing difficulties will continue to distress the steel industry.
The hefty amount of Chinese inventories and the lower from the biggest consumer China have plunged the iron ore price last week in the lowest level since October. Ore with 62 percent content at the Chinese port of Tianjin fell 1.6 percent to $137.40 per metric ton on Thursday 16th, data from The Steel Index showed. Vale S.A., the world’s second largest miner by volume, reported a 20% fall in its net profit for the fourth quarter of last year by recording $4,67 billion compared with a $5,92 billion a year earlier, citing as primary reason the decline in the iron ore price. Vale reported quarterly sales of $14,8 billion from reduced iron ore prices and the debt crisis that caused European shipments to slump. Credit Suisse predicted in a report that tighter market conditions would continue in 2012 with iron ore prices expected to be weaker. The report stated Brazilian iron ore miners will face lower year-on-year results due to lack of volume growth and 10% lower year on year average price.
However, Australia’s mega iron ore producers are planning to boost production amid current slow Chinese steel demand. Australia supplies about 43 percent of China's iron ore imports, with most coming from BHP, Rio and Fortescue. According to Bank of America-Merrill Lynch forecasts, China's steel demand is expected to grow 6 percent in 2012 and 5.8 percent in 2013, down from the stunning 12.8 percent compound annual growth during 2008-11.
BHP Billiton Ltd., the biggest mining company, said Feb. 12 a price decline probably won’t affect plans to spend $80 billion over the next five years to boost output along with copper and coal. “The Chinese have been buying well in advance,” said Gavin Wendt, founder and senior resource analyst at Mine Life Pty in Sydney. “They like to buy these commodities when the price is low and buy it in significant volumes, essentially more than what they need and stockpile it”.
Fortescue Metals Group is under a construction program to nearly triple production to 155 million tonnes in a year after securing funding last October. Fortescue Metals Group expects iron ore prices will remain around $US140 ($A131.48) per tonne in the short-to-medium term as Chinese demand remains strong but little new supply comes onto the market.Rio Tinto also assigned $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Latin American Coal - Colombia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- The University of Queensland
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
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