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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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- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- The University of Queensland
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
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