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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, 11 April 12
TWO PERCENT OF IBP CONCESSION CONTAINS 42 MMT OF COAL
COALspot.com - 42.35 million ton of coal found in just 2% of PT Insani Bara Perkasa’s total concession area of 24,477 hectare.
Accord ...
Wednesday, 11 April 12
DRY BULK MARKET STILL SUBDUED, RECOVERY NOT YET SEEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market entered the new week after the past days of easter holidays in western countries in a subdued mood. The industry’s benchma ...
Monday, 09 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first week of April ended with the Baltic Dry Index falling below 950 points, before Catholic Easter, and capesizes showing a modest upturn with ...
Sunday, 08 April 12
CHARTER RATES COULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI was almost at same levels closing slightly lower by 0.64 pct at 928 points.
The Cape index was up by 6.73 pct closing at ...
Friday, 06 April 12
INDONESIAN HBA FALL TO LOWEST LEVEL SINCE JANUARY 2011
COALspot.com - Indonesian HBA fall to lowest level since January 2011 this month. The monthly coal reference price for coal sales in April fal ...
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- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Planning Commission, India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Parliament of New Zealand
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
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