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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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Tuesday, 27 October 20
PLN STILL REFUSING TO ADAPT, A MOVE WHICH WILL HURT INVESTORS, CONSUMERS, AND THE GOVERNMENT PURSE - IEEFA
Utility’s latest planning report locks PLN into the past
PLN would be better served restructuring its business to address the current en ...
Monday, 26 October 20
'LONG ASCENT' TO RECOVERY OF GLOBAL GROWTH - BALTIC EXCHANGE
The global economy has so far avoided a “financial catastrophe” but growth projections from the International Monetary Fund’s lat ...
Friday, 23 October 20
SHIPPING LOANS AND COLLATERAL DAMAGE - VICTOR ONYEGBADO, AKABOGU & ASSOCIATES
KNOWLEDGE TO ELEVATE
Shipping finance transactions are characterised by peculiar risk factors principally on account of the shipping asset&rsq ...
Friday, 23 October 20
WHAT WILL THE 2020 ELECTIONS MEAN FOR US ENERGY? - WOOD MACKENZIE
The 2020 elections present American voters with a choice between two radically different visions for the future of energy. President Donald Trump r ...
Wednesday, 21 October 20
BRAZIL EXPORTED 238.7 MLN TONNES OF IRON ORE IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
Brazil’s iron ore exports have been gradually but steadily recovering following a disastrous winter period of 2019/2020. In the first 9 month ...
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- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Australian Coal Association
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Parliament of New Zealand
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
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