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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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Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
Thursday, 19 January 12
SOUTHGOBI RESOURCES SELLS MORE THAN FOUR MILLION TONNES OF COAL IN 2011, 58% MORE THAN 2010
COALspot.com - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) has successfully complets year 2011 on guidance in terms of coal sales and production.
...
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- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
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