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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, 01 December 11
DRY BULK MARKET RISES TO NEW HEIGHTS ON RENEWED DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept on rising this week, with the industry’s benchmark, the Baltic Dry Index (BDI) climbing to 1,846 points on Wednes ...
Tuesday, 29 November 11
SOUTH AFRICAN COAL INTO CHINA, THE ACTIVITY WAS SLOW - BRS
Capesize
The Capesize market in Atlantic stayed pretty firm last week with transatlantic rounds being fixed in the high twenties. Sentiment was les ...
Tuesday, 29 November 11
GOLDEN GATE BRIDGE OF INDONESIA COLLAPSED AT KUKAR, EAST KALIMANTAN
COALspot.com - A suspension bridge in Indonesia’s east Kalimantan province over the Mahakam river collapsed on Saturday, killing at least elev ...
Tuesday, 29 November 11
BUKIT ASAM SCOUTS RP3 TRILLION PROFIT - INSIDER STORIES
The state-controlled coal miner PT Bukit Asam Tbk (PTBA) expects to post a Rp3 trillion net income this year, reaching its target which is 50% above ...
Tuesday, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
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- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- The University of Queensland
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
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