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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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Wednesday, 22 February 12
RAW COMMODITY EXPORT BAN SPARKS SMELTER BUILDING BOOM IN INDONESIA ANTARA / THE JAKARTA GLOBE
Antara / The Jakarta Globe reported that, as the government gears up to ban all exports of unprocessed commodities, Indonesia will see 12 new ...
Tuesday, 21 February 12
THREAT ISSUED ON MINERAL FIRMS AS GOVT PLANS EXPORT BAN - THE JAKARTA POST
The Jakarta Post, one of the leading english news papaer in Indonesia reported that, the government has given mineral producers three months to subm ...
Monday, 20 February 12
JATENERGY SECURES FIRST 8000-TONNE COAL SALES CONTRACT FOR JONGKANG MINES
8000-tonne contract with Singaporean buyer signed for March delivery
50% down payment due in five working days
Production continues at both Jongka ...
Monday, 20 February 12
DIAN SWASTATIKA ACQUIRES ANDALAN LESTARI - INSIDER STORIES
Insider Stories reported that, PT Dian Swastatika Sentosa Tbk (DSSA), controlled by Fuganto Widjaja, son of Indra Widjaja, reported a 99.83% takeove ...
Monday, 20 February 12
COAL BOOM AND ENVIRONMENTAL CONCERN - SUNIL K KUMBHAT
COALspot.com - The dawn of the 21st century has seen a shift in the world's commercial balance of power, with the dominance of the US, Europe and J ...
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- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
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