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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Sunday, 19 February 12
THE SPOT FIXTURE RATES WERE REPORTED AT HIGH LEVELS - VISTAAR
COALspot.com - "The markets seems to holding back this week appears the momentum which picked up last week may slow down" - Capt. Reddy of ...
Sunday, 19 February 12
INDIKA ACQUIRES MULTI TAMBANGJAYA - INSIDER STORIES
Insider Stories reported that, PT Indika Energy Tbk (INDY) announced that wholly-owned subsidiaries have signed a conditional sale and purchase agre ...
Friday, 17 February 12
COLOMBIA COAL PRODUCTION, EXPORTS JUMP IN 2011: GOVT - COLOMBIA REPORTS
Colombia Reports reported that, colombia's coal production jumped 15.4% in 2011 to 85.8 million tonnes versus the previous year while exports rose ...
Thursday, 16 February 12
GEARING UP FOR THE EMERGING OIL & GAS OPPORTUNITIES IN MYANMAR
Press Release - Myanmar Ministry of Energy and Centre for Management Technology (CMT) to Co-host MOGP (Myanmar Oil, Gas & Power) Summit on 28 - ...
Wednesday, 15 February 12
HBA FOR FEB 2012, CLIMBS 2.09 PERCENT AND REACHED US$ 111.58 PER TON
COALspot.com - The Indonesian coal reference price for February climbs 2.09 percent to US$111.58 per ton after losing past three months. ...
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- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- PTC India Limited - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- The University of Queensland
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
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