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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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Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU
The dry market experienced one more disappointing week with tonnage oversupply and limited cargo demand that pushes earnings for shipping players to ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
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- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Australian Coal Association
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
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