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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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Thursday, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
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- London Commodity Brokers - England
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Aditya Birla Group - India
- CNBM International Corporation - China
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
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