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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, 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 ...
Monday, 12 March 12
DRY BULK RATES WILL REMAIN LOW IN 2012 SAYS DANISH SHIP FINANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its annual shipping survey Danish Ship Finance said that the current outlook for the Dry Bulk market seems unlikely to foster higher rates in any ...
Monday, 12 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first days of March appear to be more encouraging for dry bulk operators, but the outlook is still gloomy for the rest of year with earnings for ...
Sunday, 11 March 12
FREIGHT RATES FOR INDONESIA TO INDIA WILL CONTINUE TO REMAIN FIRM- VISTAAR
COALspot.com - This week saw another upward trend with all indices up except for the Cape index.
The BDI was up by 6.87 pct closing at 824 points ...
Friday, 09 March 12
MINING IN INDONESIA: RESTRICTION ON FOREIGN INVESTMENT - SUNIL K KUMBHAT
COALspot.com - Recently Govt has passed regulation instructing foreign mining companies to reduce their ownership stake.
The regulation known as ...
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- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
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