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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, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
Monday, 19 December 11
PLN WILL NO LONGER BUY COAL FROM TRADERS
COALspot.com - Indonesia's state electricity company PT Perusahaan Listrik Negara will no longer allow traders to become their suppliers, said, its ...
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- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- MS Steel International - UAE
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