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Thursday, 13 January 11
DRY BULK RATES HIT NEW MULTI-MONTH LOWS ON AUSTRALIAS FLOODS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 Floods in Australia’s Queensland has seriously disrupted coal shipments and together with a flood of vessels has pushed freight rates for dry bulk carriers to new multi-month lows. As a result, the Baltic Dry Index fell further yesterday to just 1,453 points, losing 1.82% on the day, while the suffering Capesize segment retreated by a further 4.77%.
The BDI has now recorded 21 straight losing sessions, losing almost 34% of its value. According to calculations from John Cotzias, head of N.Cotzias Shipping Group, in 58 sessions spanning at just less of three months, there have been only 10 days, during which the index was positive.
“The Cape index is counting 12 falling days and has overall lost in this period close to 40% of its volume. BDI is currently below levels of 5 Feb 2009 when the index was rising” said Mr. Cotzias. The market hasn’t seen such low levels since November of 2002, except of course the October 2008 market crash.
In a separate analysis, BIMCO’s shipping analyst Peter Sand said that all in all – the worst flooding in Queensland for more than 50 years “is not only bad for Australia, it's also bad for shipping as volumes on coal and iron ore go down considerably - and more vessels are free on the market putting pressure on the spot market for vessels. Average Capesize time charter rate that has been falling since end of November is now down at USD 11,266 per day trading lower every day” said Sand. He went on to state that iron ore which is exported out of West Australia is not directly affected yet even though that area has received much rain also. Lower steel production and thus also lower seaborne volumes of the two key dry bulk commodities is set to impact the market negatively over the next months. Australia is the world's largest overall coal exporter ,No. 2 in thermal coal exports after Indonesia but second to none in coking coal exports. Australia is key global coking coal supplier accounting for 60% of global seaborne exports. Within thermal coal Australia accounts for 20%. Thermal coal is used for power generation and heating, while coking coal is used in the production steel. As we have already seen, coal customers will try to find other ways to satisfy their demand for thermal coal but the real trouble is coking coal - as it is very hard to get from elsewhere. Shortage of Australian coking coal means that the worlds steel producers, primarily located in Asia, can be forced to cut the production of steel and with it also the demand for iron ore. ”A slowdown in steel production and iron ore demand is toxic to dry bulk shipping in general and for the larger vessels, Capesize and Panamax in particular. The iron ore contract prices for Q1-2011 have already been set at 7% higher than the previous quarter - but spot iron ore prices can still fluctuate and will move south on lower demand. China imports 40-50% of its coking coal from Australia. Japan, the world’s largest coking coal importer is heavily impacted also. The flooding may see contract prices for coking coal hiking significantly due to spot prices going sharply up as a result of the tight market. A part of the mechanism behind the contract prices is the spot price development. This may result in coking coal prices moving from USD 225 per tonnes in Q1-2011 up to USD 270-300 per tonnes according to several commodity analysts.
When the mines call force majeure - the steel mills must go to the spot market for coking coal - at a much higher price than the contract price for this important steel production ingredient - if they can get it at all. Alternative sources of coking coal are the US and Canada but reports are that the tight market has impacted prices also there, leading to higher commodity prices. So if coking coal spot goes up on tight supply - iron ore spot price can go down as a consequence of lower demand. A price hike in coking coal will increase the
production cost for steel - in a market already running on low margins” said BIMCO’s analyst.
So where will it go from here? “It is a string of events that cause shipping demand out of Australia to go down. Moreover the market place is plentifully supplied with tonnage so the fact that some of the commodities will be supplied from sources further away will only have very limited impact on the market. The first quarter of 2011 - do not hold great prospects for the dry bulk market - mainly because the oversupply of vessels is getting too heavy even for the "normal" inefficiencies of the market to make impact on the freight rates. The Australian situation is set to affect the market for at least a of couple months - meaning that the situation outlined above will stay a drag on the overall market and freight rates for some time” concluded Sand.
Talking about the potential overcapacity, Cotzias said that there is a total of over 3,500 dry bulk carriers on order pending until 2014 of a total of 250 million tons dwt. “These orders are split chronologically as follows: 1,854 ships are due for 2011 making up a total of 128 mil dwt, 1,106 ships due in 2012 of 87 mil dwt and 360 ships of 30 mil dwt due for 2013-2014. In total there is a massive orderbook only on the Bulkers section and we should not understate the fact that 2011 faces us with more than 55% of the total orderbook and that we should also include in this 114 orders of 4mil dwt that are “carried forward” from 2010”.
Source: Nikos Roussanoglou, Hellenic Shipping
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Friday, 06 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
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- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
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