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Monday, 27 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 The pessimism in the dry market persists with the Baltic Dry Index still trying to find a steady pace of growth and average time charter earnings for all vessel classes floating at significantly lower levels than 2011. The steel market fundamentals have brought very low earnings for all dry bulk carrier vessels, even for smaller ones handies/supras, which were outperforming last year when capesizes and panamaxes were suffering. There are still hopes for improvement in March and onwards since January and February are seasonally weak months with Chinese buying less iron ore due to National Festivities and hefty stockpiles. Inventories at key Chinese steel mills monitored by China’s Iron & Steel Association reached 10.98 million tones by the end of January, the highest since the second half of 2009 and rising 24.5% from early January. CISA said in its monthly Report that it will be difficult for demand to improve significantly during end February to early March and inventories are likely to continue rising.
The world crude steel production for the 59 countries reporting to the World Steel Association was 117 million tonnes (Mt) in January 2012. This is -7.8% lower than January 2011. China’s crude steel production for January 2012 was 52.1 Mt, a decrease of -13% compared to January 2011. Elsewhere in Asia, Japan produced 8.6 Mt of crude steel in January 2012, a decrease of -10.6% compared to the same month last year. South Korea’s crude steel production for January 2012 was 5.1 Mt, -9.6% down compared to January 2011.
Despite the BDI lost again ground by falling every day during last week it finally ended to close in green with an improvement on Friday by earning 12 points from Thursday’s closing. The BDI closed at 717 points by gaining only 1 point from previous week’s closing of 718 points. Overall, all Baltic Dry Indices closed on green apart from panamaxes. There was an upturn in the capesize segment, a downward trend for panamax and a stronger performance in the supramax and handysize segments. The handysize segment showed the largest increase by gaining 16 points from last week, up 4.2% and ending at 395 points with vessel earnings near to $5,900/day in contrast with a 12% decline in the Baltic Panamax Index by loosing 113 points on a weekly basis and ending at 836 points. The BPI has surpassed the 1,000 points mark in mid February, by standing at 1018 points on February 14th, a yearly high level.
For large size vessels, capesizes, which typically transport 150,000 ton cargoes of iron ore and coal, the BCI ended by gaining 43 points on a weekly basis, up by 2.94% standing at 1504 points with a significant bounce back on Friday. Capesize earnings rose to $5,699/day from the yearly low of $5,158 on February 21st with China boosting its cargo demand loadings from Brazil and Australia. According to a London based analyst at derivatives broker Freight Investor Services Ltd there has been clearly some Chinese buying at these low freight levels that is sufficient to move rates up slightly. Prices (TSIPIO62) for iron ore imported into the Chinese city of Tianjin increased for a fifth session, gaining 0.2 percent to $139 a metric ton, according to figures from the Steel Index Ltd.
Spot prices of imported iron ore in China rose on Friday as traders bid up the market, betting on a recovery in domestic steel demand when construction projects resume next month. According to traders, global miner BHP Billiton sold several cargoes this week at prices around $3 more than previous deals. Australian Pilbara iron ore fines with 61.5 percent iron content was quoted at $138-$140 a tonne, cost and freight, up $2 from Thursday, according to Chinese consultancy Umetal. “Some traders are trying to push up the price because they think steel demand would pick up in March when the weather returns better and construction activity resumes in China”, he said. BHP rivals Rio Tinto and Vale were also offering more cargoes on Friday. Iron ore with a 62% content rose 2.1% to $138.70 per tonne on Thursday, its biggest percentage gain since December 21st, according to Steel Index price provider.
Panamax vessels, which usually transport 60,000-70,000 tonne cargoes of coal and grain, experienced severe decline with earnings falling below $7,000/day, when last year were earning around $14,000/day, and the BPI loosing 113 points from last week’s closing, down by 12% and standing at 836 points. The segment is feeling the pain from overcapacity with at least one panamax, kamsarmax or post panamax being delivered into service every day so far this year. Owners in the Atlantic are said to subsidizing their operating expenses as they are not earning enough to cover the cost of bunkers on ballast legs. With all February grain cargoes from east coast South America fixed to ships earlier this month, the vessels being booked at the moment for March loading dates are almost exclusive those ballasting from the Pacific markets.
Supramax vessels, which carry about 25 percent less than Panamaxes, showed healthier levels from a distressed Atlantic status with earnings rising near to panamax levels of about $6,900/day and the BSI gaining 21 points, up by 3.2% from last week’s closing and standing at 662 points. In addition, handysize units gained a sharp increase of 4.2% with the BHSI standing at 395 with earnings rising to $5,980/day, almost 40% lower than previous year when they earning near to $10,000/day.
Even the positive upturn seen during the last week in the freight markets there is still a road ahead for full recovery since the vessels’ glut is still a major threat for the dry bulk market and Chinese iron ore import market sentiment remains fragile with spot iron ore prices dropping on the increase of port stockpiles. The benchmark iron ore price trading was at $140/tonne in recent months from a record high of $180/tonne seen last year. The chief executive officer of Rio Tinto, the second largest supplier of iron ore, sees a period of volatility of six months for the iron ore market before stabilizing.
The steel needs from China and other developing countries are expected to ensure strong commodity demand on the long term, he added. "The world is an uncertain place at the moment and we have seen some softness in China, but demand remains strong," he said.
China alone will require at least another 100 million metric tons of iron ore a year for the next eight years, including 600 million tons in that period to satisfy growth and 200 million to replace the expected exit of high-cost supplies, he said, adding that Rio plans to contribute about a quarter of this additional ore to China.
The move of China to cut banks’ reserve requirements ratio by 0.5% to be effective from February 24th and Vale’s decision to move to spot iron ore pricing may be two positive key developments for the future of dry bulk earnings. Vale has announced that it will sell 80% of its iron ore at spot market pricing, which satisfies Chinese steelmakers by gaining from falling iron ore prices. February has almost ended and BDI has not still managed to break the psychological barrier of 1,000 points mark with earnings for capesize vessels trading at similar levels with handysizes. March may be a healthier month for large size units as Chinese iron ore stockpiles has shown a sense of retreat during the last days of February, by falling less than the record high of 100 mil tones seen almost two weeks ago, and a boosted Chinese cargo buying demand that increased capesize loadings from Australia and Brazil.
Source: Maria Bertzeletou, Hellenic Shipping
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Monday, 27 February 12
INDONESIAN COAL EXPORTS TO CHINA DROPS 39.76 PERCENT IN JANUARY 2012
COALspot.com: Indonesia, the world largest coal exporter, shipped 28.21* mln mt of coal in January 2012, slightly lower than its December 2011 ...
Sunday, 26 February 12
THE FREIGHT RATES FOR INDONESIA TO INDIA IS LIKELY TO BE FIRM FOR NEXT 2/3 WEEKS - VISTAAR
COALspot.com – “There was not much change in the BDI and other indices this week except for the Panamax which was down by 11.91 pc ...
Friday, 24 February 12
DRY BULK MARKET POSTS FIRST REBOUND IN A WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was expected since mid-week, the dry bulk market's benchmark, the BDI (Baltic Dry Index) has managed to put a stop in a 6-day losing rally, endi ...
Thursday, 23 February 12
2.5 PANAMAX VESSELS PER AVAILABLE CARGO FOR MARCH DATES - FEARN BULK
Handy
Another depressing week for Supras in both basins. Lack of fresh business and over-supply of tonnage in the Atlantic pushed rates south. Cont ...
Wednesday, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Economic Council, Georgia
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- The University of Queensland
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
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