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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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Thursday, 01 March 12
BUKIT ASAM TARGETS EUROPEAN INVESTORS
COALspot.com - PT. Bukit Asam (persero) Tbk, Indonesian state owned coal miner is planning to conduct road show in Europe next week to target at Eur ...
Thursday, 01 March 12
INDO-INDIA, LARGE ECO SUPRA CAN FETCH CLOSE TO USD 9K DOP N.CHINA - FEARNLEYS AS
Handy
The Atlantic Handysize market did not see any signs for recovery this week. It is still a major lack of spot cargoes and an oversupply of pro ...
Wednesday, 29 February 12
69 MINERS AGREE TO RENEGOTIATE CONTRACTS - THE JAKARTA POST
The Jakarta Post, one of the leading English news papaer in Indonesia reported that, as many as 60 coal contracts-of-work (PKP2B) and nine non-coal ...
Wednesday, 29 February 12
PUTTING COAL GASIFICATION TO WORK
Clifford Reese of the SSOE Group looks at practical solutions for district energy leaders who wish to implement clean coal technology.
Coal fuels ...
Monday, 27 February 12
COAL MINING PROFITS TOO HIGH, SAYS GOVT - TEMPO INTERACTIVE
Tempo Interactive reported that, Energy and Mineral Resources Deputy Minister of Indonesia Widjajono Partowidagdo has criticized coal-mining compani ...
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- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- The University of Queensland
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- PTC India Limited - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
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