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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 $10,481/day.
The weak performance of capesize segment troubles the dry bulk industry with the BDI crawling to move at levels of one year ago and break the barrier of 1,000 points. China, the world’s second largest economy and the largest importer of iron ore and coal, has shown signs of negative economic growth with the World Bank estimating that China’s GDP annual growth will decline to 5.9% by 2021 after three decades of 10% average annual growth. The critical issue is if China would be the massive buying power for dry bulk materials, in the forthcoming years, to support and absorb the ample tonnage of ships in the market. A negative catalyst factor is China’s target to achieve iron ore self efficiency. According to the China Iron & Steel Association, China is aiming to improve its self efficiency in iron ore and continue to consolidate the steel industry in a bid to raise the output of its major steel makers by 10% within the next four years. The government expects the country’s top 10 steel manufacturers to account for 60% of the country’s steel output by 2015, Wang Xiaoqi, CISA vice chairman, said at a trade conference held in Beijing.
However, players haven’t lost their shipping confidence with mounting hopes for a firmer return of the market after the end of the first quarter of the year as Chinese steel mills are restocking on iron ore and they slowly increase steel output during the seasonally busy periods of March and April for the construction and manufacturing sectors.
Source: Maria Bertzeletou, Hellenic Shipping
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Monday, 05 March 12
SOUTHGOBI ANNOUNCES AGREEMENT TO SELL ITS THERMAL COAL TSAGAAN TOLGOI DEPOSIT FOR US$ 30 MILLION
SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) announced today an agreement to sell its thermal coal property, the Tsagaan Tolgoi Deposit to Modun Re ...
Monday, 05 March 12
SOME RESOURCE TITANS NOT THRILLED WITH INDONESIAN EXPORT BAN - THE JAKARTA GLOBE
The Jakarta Globe reported that, local representatives of major business associations in East Kalimantan have protested a government regulation that ...
Sunday, 04 March 12
SE ASIA WAS FIRM FOR TRIPS TO INDIA AND CHINA - VISTAAR
COALspot.com - This week saw another upward trend with all indices up and generally market was firm.
The BDI was up by 7.38 pct closing at 771 po ...
Friday, 02 March 12
DJMBP HAS ANNOUNCED SECOND BATCH OF CLEAR N CLEAN CERTIFIED MINERS
COALspot.com - The Directorate general of mineral & coal of Indonesia has announced second batch of companies who have passed IUP Clear and Clea ...
Thursday, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
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- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
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