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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, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
Friday, 27 January 12
DEMOLITION ACTIVITY NEEDS TO INCREASE SIGNIFICANTLY THIS YEAR AS WELL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their ...
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- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Minerals Council of Australia
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- The University of Queensland
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
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