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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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Wednesday, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
Wednesday, 07 March 12
3RD MOZAMBIQUE COAL CONFERENCE
3rd Mozambique Coal Conference
2-4 July 2012 | Joaquim Chissano International Conference Centre , Maputo, Mozambique
http://www.immevents.com/mo ...
Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk c ...
Wednesday, 07 March 12
BUKIT ASAM EYES 39% RISE IN COAL SALES - INSIDER STORIES
Insider Stories reported that, PT Bukit Asam Tbk is scouting a 39% increase in coal sales volume to 18.66 million tons this year from last year with ...
Wednesday, 07 March 12
PETROSEA SEALS US$188 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, coal mining contractor PT Petrosea Tbk has secured a US$188 million additional contract from its affiliated firm PT S ...
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- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Economic Council, Georgia
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- The University of Queensland
- Parliament of New Zealand
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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