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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, 19 January 12
14TH VOGP MEETING IN HO CHI MINH CITY HANDS OUT LATEST UPDATES AND DEVELOPMENTS IN VIETNAM'S ENERGY INDUSTRY
Press Release: At upcoming 14th Vietnam Oil Gas Power on 27-28 Feb in Ho Chi Minh City the industry’s most influential names including Petrovi ...
Thursday, 19 January 12
DELTA DUNIA SEALS US$820 MIO CONTRACT INSIDER STORIES
Insider Stories reported that, PT Delta Dunia Makmur Tbk (DOID) has announced that its primary operating subsidiary, PT Bukit Makmur Mandiri Utama ( ...
Wednesday, 18 January 12
WARM WINTER ACROSS EUROPE HAS IMPACTED NEGATIVELY COAL DEMAND - BRS
With the Chinese New Year just a week away, all markets are slowing down. The drop in freight rates for all sizes has been significant over the past ...
Wednesday, 18 January 12
DRY BULK MARKET'S DRAMA CONTINUES IN START OF NEW WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of newbuilding deliveries, coupled with a slow start to the new year, a typical trend for the dry bulk market, has led the industry's benc ...
Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
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- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- The University of Queensland
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Planning Commission, India
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
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