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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, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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- Ministry of Mines - Canada
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
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