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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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Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
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 ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
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- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
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