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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, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
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- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- The University of Queensland
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Siam City Cement - Thailand
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