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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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Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
Thursday, 19 January 12
SOUTHGOBI RESOURCES SELLS MORE THAN FOUR MILLION TONNES OF COAL IN 2011, 58% MORE THAN 2010
COALspot.com - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) has successfully complets year 2011 on guidance in terms of coal sales and production.
...
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- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
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- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
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- Ministry of Transport, Egypt
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- Larsen & Toubro Limited - India
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- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
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- Banpu Public Company Limited - Thailand
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- Meenaskhi Energy Private Limited - India
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- MS Steel International - UAE
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
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- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Toyota Tsusho Corporation, Japan
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- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
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- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
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- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
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- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
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- Altura Mining Limited, Indonesia
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- Directorate General of MIneral and Coal - Indonesia
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- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
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- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- The University of Queensland
- Mintek Dendrill Indonesia
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- Miang Besar Coal Terminal - Indonesia
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- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Planning Commission, India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- VISA Power Limited - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
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- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
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- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
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- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
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- Directorate Of Revenue Intelligence - India
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- European Bulk Services B.V. - Netherlands
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- Trasteel International SA, Italy
- Tamil Nadu electricity Board
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- PetroVietnam Power Coal Import and Supply Company
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