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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 levels near or below operating expenses. The Baltic Dry Index closed at 717 points on Friday of February 17th, gaining only two points more than the previous week’s closing and it is now standing 55 points above from the historical low level in the last 26 years of 662 points on February 1st. The dry market normally shows a plunge at the beginning of every year as Chinese festivities bring a lull in iron ore buying activity with the BDI finding its pace upon the return from holidays. However, the index now seems that struggles to keep a steady pace of growth since it is still below the psychological barrier of 1,000 points and it is unquestionable if would surpass this level till the end of February. Following its positive upward movement in the previous week by gaining 68 points more on a weekly basis and panamaxes being the best performers, the sentiment is again distrustful with capesize earnings being extremely flat and handysizes showing a stronger resilience this week.
The BHSI showed a 3.5% week-on-week increase in contrast with a 1.8% week-on-week fall in the BPI from its 39.5% remarkable increase in the week ending February 10th. Overall, the BDI showed a minimal rise of 0.2% on a weekly basis by falling for the last three consecutive days of the week and ending to loose 12 points from the high of 729 points at the beginning of the week. Average time charter earnings for all vessel sizes are still floating at low levels, below $10,000/day, with increased worries for a prompt revival before the end of the first quarter of the year. Panamax and supramax vessels seem to have a better outlook to break the barrier of $10,000/day by earning ground from a strong Chinese coal demand, while capesizes may suffer for a longer period of time since the Chinese iron ore buying appetite, the main driver for healthier capesize earnings, is still fragile.
For large size vessels, capesizes, the market was extremely flat with the BCI gaining only 4 points more at the end of the week by closing at 1461 points, up by 0.27% on a weekly basis. The Atlantic market remains particular inactive despite some iron ore activity from Western Australia. W Australia/Qingdao rates is said to have improved only slightly, to $7,70/tonne, compared to $7,60/tonne last week. In the panamax market, the week opened with a degree of optimism with the index surpassing the 1,000 points mark level, but by the end of the week it fell to 949 points, loosing 18 points, down 1.86% from previous week’s closing.
The week ended also negative for supramax owners with a retreat of decline in Atlantic supramax rates and a rise in Pacific from record lows. Owners with tonnage in the European side found almost impossible to consider the ballast option at the prevailing freight rates and bunkering expenses, while owners in the East with tonnage seem to have better chance with rates covering operating expenses. Some reasonable mineral business from Indonesia gave a substance in the segment with the BSI loosing only 4 points from previous week’s closing and ending at 641 points, down by 0.6% week-on-week basis.
The current status of China’s steel market and the high levels of iron ore inventories do not currently support massive iron ore imports enough to lift the BDI above 1,000 points and capesize earnings at the levels of more than $10,000 day.
According to Data from the General Administration of Customs, imports by China, the world’s biggest buyer of the steel making ingredient, fell 7.4% to 59,32 million tons in January from a month earlier due to the Lunar New Year holiday. Even January gives a distorted picture for Chinese buying sentiment due to National Festivities; China’s steel market remains sluggish. The China Iron and Steel Association reported that daily crude steel production averaged 1,67 million tons from January 21 to January 31. This is similar with the average daily production that occurred during January 11 to January 20, but is down significantly from last year’s record of 2,02 mt average daily production that occurred during June 21 to June 30.
Furthermore, Chinese iron ore inventories reached the alarming level of nearly 100 million mt by the beginning of February and fell to 99.97 million tons by February 13th, but it is still hefty and indicates the slump in demand for steel production in China. Due to lower demand as a result of the slowing economy and tight liquidity, steel prices have been plunging since last October, leaving steel mills with marginal profits or making losses. Major mill Angang Steel, for instance, announced a net loss of some 2.2 billion yuan for 2011 due to rising raw material costs. CISA Chairman Zhu Jimin said that the possibility of losses and meager profits for steel mills is likely to increase this year as increased costs, falling demand and financing difficulties will continue to distress the steel industry.
The hefty amount of Chinese inventories and the lower from the biggest consumer China have plunged the iron ore price last week in the lowest level since October. Ore with 62 percent content at the Chinese port of Tianjin fell 1.6 percent to $137.40 per metric ton on Thursday 16th, data from The Steel Index showed. Vale S.A., the world’s second largest miner by volume, reported a 20% fall in its net profit for the fourth quarter of last year by recording $4,67 billion compared with a $5,92 billion a year earlier, citing as primary reason the decline in the iron ore price. Vale reported quarterly sales of $14,8 billion from reduced iron ore prices and the debt crisis that caused European shipments to slump. Credit Suisse predicted in a report that tighter market conditions would continue in 2012 with iron ore prices expected to be weaker. The report stated Brazilian iron ore miners will face lower year-on-year results due to lack of volume growth and 10% lower year on year average price.
However, Australia’s mega iron ore producers are planning to boost production amid current slow Chinese steel demand. Australia supplies about 43 percent of China's iron ore imports, with most coming from BHP, Rio and Fortescue. According to Bank of America-Merrill Lynch forecasts, China's steel demand is expected to grow 6 percent in 2012 and 5.8 percent in 2013, down from the stunning 12.8 percent compound annual growth during 2008-11.
BHP Billiton Ltd., the biggest mining company, said Feb. 12 a price decline probably won’t affect plans to spend $80 billion over the next five years to boost output along with copper and coal. “The Chinese have been buying well in advance,” said Gavin Wendt, founder and senior resource analyst at Mine Life Pty in Sydney. “They like to buy these commodities when the price is low and buy it in significant volumes, essentially more than what they need and stockpile it”.
Fortescue Metals Group is under a construction program to nearly triple production to 155 million tonnes in a year after securing funding last October. Fortescue Metals Group expects iron ore prices will remain around $US140 ($A131.48) per tonne in the short-to-medium term as Chinese demand remains strong but little new supply comes onto the market.Rio Tinto also assigned $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Wednesday, 26 October 11
INDIAN MARKET WAS REMAINED TIGHT THE WHOLE LAST WEEK - BRS
The market once more seems to be at a crossroads. The indices last week remained fairly stable (except for the Panamax sector), ending the week as f ...
Tuesday, 25 October 11
DRY BULK MARKET STEADY, ANALYSTS LOOKING FOR ADDED PRESSURE ON THE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was unchanged on Monday, with the industry’s benchmark, the BDI (Baltic Dry Index) ending the session at 2,153 points, exa ...
Monday, 24 October 11
NEW HEAD OF INDONESIA'S MINING MINISTRY GETS RAKED OVER THE COALS - JOSEPH KIRSCHKE
COALspot.com - Following Indonesia’s presidential cabinet shakeup last week, many are questioning the qualifications of Energy and Mineral Res ...
Monday, 24 October 11
CHINA QINHUANGDAO COAL PRICE RISES TO HIGHEST IN THREE YEARS - BUSINESSWEEK
Business week reported that, China’s power-station coal price rose to the highest level in three years as power stations and central heating p ...
Monday, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
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- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- The University of Queensland
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- PTC India Limited - India
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
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