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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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Tuesday, 04 October 11
INDONESIA RAISES COAL BENCHMARK (HBA) FOR FIRST TIME IN 4 MONTHS
COALspot.com - Indonesia raised the monthly reference price for sales in October by 2.56 percent, the first increase since June.
The Ministry of ...
Tuesday, 04 October 11
COAL MINING GROUP WANTS EXPORT TAX, NOT EXCISE - JG
One of the leading English news paper in Indonesia, The Jakarta Globe reported that, the government shall reimpose a duty on coal exports, classifyi ...
Sunday, 02 October 11
INDIAN COAL IMPORTS PICKED UP - CAPT. REDDY
COALspot.com - The BDI dropped by 1 pct and Cape index dropped by 6 pct closing at 1,899 points and 3,136 points respectively. However all other seg ...
Saturday, 01 October 11
2012 TO BE ANOTHER CHALLENGING YEAR - CEO, REMI MARITIME
Shipowners are facing another challenging year in 2012 said Mr. Leonidas Polemis CEO of Remi Maritime Corporation, urging caution towards operating ...
Friday, 30 September 11
MINING BILL CLEARED, FIRMS TO SHARE 26% PROFITS WITH LOCALS - NDTV
NDTV reported that, The Union Cabinet cleared the draft mining bill aimed at regulating mining activities Friday. The bill proposes a profit-sharing ...
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- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
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