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Monday, 05 March 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
 An air of optimism poured in the market this week for dry bulk shippers with the Baltic Dry Index recording daily gains during the end of February by rising for the seventh straight day and closing at 771 points, up by 53 points or 7.38% from last Friday’s closing. All the indexes reflecting daily freight market rates for capesize, panamax, supramax and handysize dry bulk vessels closed in green with smaller sized vessels, supramax and handysize, showing the largest week-on-week increase, 12.54% and 10.63% respectively in contrast with a 1.40% and 0.96% rise for capesize and panamax vessels respectively. There are increasing doubts if this recent euphoria will stay since there are many newbuildings on stream and panamax ship operators are already experiencing severe pains from continuous deliveries with gloomy predictions for China’s economic growth, the main demand driver for raw materials’ transportation.
For large sized vessels, capesizes, which typically transport 150,000 ton cargoes of iron ore and coal, the market remains largely flat with the BCI gaining 21 points on a weekly basis, up by 1.4% standing at 1525 points, whereas average daily earnings are floating at levels below those for handysize units, less than $6,000/day. The over abundance of ships and the limited inquiry in the Atlantic market persist to distress capesize operators’ financial performance with earnings below breakeven levels. Spot and period chartering activity is piecemeal with a vessel of 150,000 tons rumored to have been fixed for an east coast Australian round at $7,000/day. In the period market, a 169,000 tons vessel is said to have booked from China for 4 to 7 months at $12,300/daily.
The capesize segment is still very fragile as Chinese have not fully regained their iron ore buying appetite with hefty iron ore inventories. Chinese steel production has found a small amount of support but remains relative low. The China Iron & Steel Association reported that daily crude steel production averaged approximately 1,71 million tons from February 1 to February 10. This is an increase of 2% from the 1,67mt average daily steel production occurred during January 21 to January 31, but down significantly from last year’s record 2,02mt average daily production during June 21 to June 30. Spot iron ore prices are on rise, near to $140/tonne, on a rebound of Chinese demand ahead of construction projects restarts in March. Estimations for a decline in Chinese iron ore imports for 2012 would be a highly negative development for capesize earnings. According to China Mining Association, China may import as much as 14% less of the steelmaking raw material this year as domestic production increases. Imports may be between 590 million metric tons and 650 million tons this year, while last year’s imports were 686 million tons, according to Bloomberg calculations based on General Customs data.
The panamax market appears to be in a better condition as China’s coal demand appears more supportive and average daily earnings are above $6,500, when last year vessels were earning more than doubled. Panamax operators are also facing serious issues from vessel oversupply and strong South American grain demand adds a beneficiary key factor for the healthy performance of earnings. There was said to be a healthy list of cargoes, but rates have hardly moved as charterers could pick from ships coming from the Continent, Mediterranean, the Indian Ocean and Southeast Asia. The BPI gained only 8 points from last week’s closing, up by 0.96% and standing at 844 points.
China’s thermal coal market has shown weakness amid expectations for an upward movement in March that drags vessels earnings below $10,000/day. With coal stocks remaining high at both Chinese power plants and coal ports, a Beijing-based trader said the Chinese coal market is likely to remain slack for the next couple of weeks. Coal stocks at China's key power plants totaled 74.45 million mt on February 20, able to last for about 20 days of burning, according to figures from the National Development and Reform Commission. However, the recent drops in coal stocks at coastal ports, together with the month-long overhaul of the Datong-Qinhuangdao railroad rumored to be starting in mid-March, may end the weakness in China's coal market, market sources said. Fangcheng Port in southern China's Guangxi Zhuang Autonomous Region is reported to be holding slightly over 6 million mt of coal and incoming coal vessels have to wait for about a week before they can be unloaded. "Not only Fangcheng Port, other major coal ports also see their stockyards packed," a Shandong-based trader said.
Supramax vessels, which carry about 25 percent less than panamaxes, showed the strongest performance this week with the BSI gaining 83 points, up by 12.5% from last week’s closing and standing at 745 points. Average daily earnings are above $7,700, but 50% lower than last year with the Atlantic market still being distressed. In the Pacific, the south-east Asia mineral trades, including a significant amount of nickel ore business, has been driving the recent improvement. A vessel of 55,000dwt built 2005 is said to have been fixed for a trip via Indonesia to India at $14,500 daily.
In addition, handysize units gained for a second consecutive week a sharp increase of 10.6% with the BHSI standing at 437and earnings rising to $6,630/day, almost 37% lower than previous year when they were earning $10,481/day.
The weak performance of capesize segment troubles the dry bulk industry with the BDI crawling to move at levels of one year ago and break the barrier of 1,000 points. China, the world’s second largest economy and the largest importer of iron ore and coal, has shown signs of negative economic growth with the World Bank estimating that China’s GDP annual growth will decline to 5.9% by 2021 after three decades of 10% average annual growth. The critical issue is if China would be the massive buying power for dry bulk materials, in the forthcoming years, to support and absorb the ample tonnage of ships in the market. A negative catalyst factor is China’s target to achieve iron ore self efficiency. According to the China Iron & Steel Association, China is aiming to improve its self efficiency in iron ore and continue to consolidate the steel industry in a bid to raise the output of its major steel makers by 10% within the next four years. The government expects the country’s top 10 steel manufacturers to account for 60% of the country’s steel output by 2015, Wang Xiaoqi, CISA vice chairman, said at a trade conference held in Beijing.
However, players haven’t lost their shipping confidence with mounting hopes for a firmer return of the market after the end of the first quarter of the year as Chinese steel mills are restocking on iron ore and they slowly increase steel output during the seasonally busy periods of March and April for the construction and manufacturing sectors.
Source: Maria Bertzeletou, Hellenic Shipping
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Friday, 09 March 12
SHIP OWNERS LOOKING TO CHINA FOR REVIVAL, WHILE THEY KEEP SELLING OLD SHIPS FOR SCRAP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With China’s economic policy plan for the future on every ship owner’s mind, at least those involved in the dry bulk industry, the lates ...
Thursday, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
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- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- White Energy Company Limited
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
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