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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Australian Coal Association
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
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