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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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Thursday, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
Monday, 27 February 12
INDONESIAN COAL EXPORTS TO CHINA DROPS 39.76 PERCENT IN JANUARY 2012
COALspot.com: Indonesia, the world largest coal exporter, shipped 28.21* mln mt of coal in January 2012, slightly lower than its December 2011 ...
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- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- White Energy Company Limited
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Kalimantan Lumbung Energi - Indonesia
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