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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, 18 September 20
INDIA'S COAL-FIRED POWER OUTPUT PICKS UP AS INDUSTRIAL USE RISES - REUTERS
India’s coal-fired electricity generation rose 9.4% in the first half of September, provisional government data showed, as demand from indust ...
Friday, 18 September 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, 17 September 20
LAST HOPES FOR DEMAND GROWTH SET TO DISAPPOINT THERMAL COAL EXPORTERS - IEEFA
Asian thermal coal exporters are fighting an uphill battle even in new markets
The world’s largest thermal coal exporter is eyeing new m ...
Wednesday, 16 September 20
MARKET INSIGHT - INTERMODAL
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction ...
Friday, 11 September 20
IMO 2020: A REVIEW OF THE TRANSITION TO VLSFOS - GARD
KNOWLEDGE TO ELEVATE
Many predictions were made in the run up to the imposition of the MARPOL 2020 sulphur cap, none of which was that the tra ...
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- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
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