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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, 07 March 12
ASSESS ASIAS POTENTIAL, DEVELOPMENTS AND APPETITE FOR SHALE AT SHALE GAS SUMMIT
Press Release - Assess Asia’s Potential, Developments and Appetite for Shale at Shale Gas Summit on 23-24 Apr, 2012 in Beijing
China is rep ...
Wednesday, 07 March 12
3RD MOZAMBIQUE COAL CONFERENCE
3rd Mozambique Coal Conference
2-4 July 2012 | Joaquim Chissano International Conference Centre , Maputo, Mozambique
http://www.immevents.com/mo ...
Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk c ...
Wednesday, 07 March 12
BUKIT ASAM EYES 39% RISE IN COAL SALES - INSIDER STORIES
Insider Stories reported that, PT Bukit Asam Tbk is scouting a 39% increase in coal sales volume to 18.66 million tons this year from last year with ...
Wednesday, 07 March 12
PETROSEA SEALS US$188 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, coal mining contractor PT Petrosea Tbk has secured a US$188 million additional contract from its affiliated firm PT S ...
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- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Australian Coal Association
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Planning Commission, India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
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