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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 $3.4 billion to expand iron ore mining in Australia, and expects its iron ore production in Australia to reach 230 million tonnes by the end of this quarter and 283 million by the end of calendar 2013.
The recent downturn of the dry market stemming mainly from slow Chinese demand does not hamper major iron ore producers that still see future in China’s buying power that could lead steel market and vessels earnings at higher levels. The question now is how the freight markets will response to a revamping of Chinese iron ore consuming at the current oversupply tonnage.
Source: Maria Bertzeletou Hellenic Shipping
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Tuesday, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
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- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Australian Coal Association
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- The Treasury - Australian Government
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
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