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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, 26 January 12
ABM INVESTAMA SEALS US$100 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, PT Reswara Minergi Hartama, a subsidary of PT ABM Investama Tbk (ABMM), has sealed a 2 million tons of coal export co ...
Thursday, 26 January 12
DRY BULK MARKETS DOWNFALL KNOWS NO LIMITS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s demise seems to have no visible end, as China’s Lunar Year Holidays continue this week, thus leaving demand with n ...
Wednesday, 25 January 12
CLEAN AND CLEAR MINING PERMITS TO BE COMPLETED END OF 2012 - BISNIS.COM
Bisnis.com reported that, the government plans to announce 700 mining permits with "clean and clear" status without overlapping on other p ...
Tuesday, 24 January 12
ANOTHER SEVERE DROP IN THE CAPESIZE - BRS
The lunar year celebrations and the high number of new building deliveries (more than 35 Capes so far in January as owners push 2011 deliveries into ...
Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
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- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Planning Commission, India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
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