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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, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
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- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- VISA Power Limited - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- The University of Queensland
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
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