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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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Wednesday, 09 September 20
MARKET INSIGHT - INTERMODAL
The uneventful summer lull which is coming to an end soon has left its stigma on the newbuilding market, which has already been devastated by the g ...
Saturday, 05 September 20
INDIA WON'T KICK ITS COAL HABIT SO EASILY - HINDU BUSINESS LINE
India has traditionally considered itself lucky to have been endowed with abundant coal reserves, which it has sought to use to meet its energy nee ...
Saturday, 05 September 20
FINANCING COMPLETE FOR 900MW FIFTH PHASE OF MASSIVE DUBAI SOLAR PARK: ARABIAN BUSINESS
Saudi-based ACWA Power on Thursday announced it has completed the signing of all financing agreements for the fifth phase of the Mohammed bin Rashi ...
Saturday, 05 September 20
POLISH COAL DEMAND EXPECTED TO FALL BY 7 MLN TONNES NEXT YEAR: MINISTER - REUTERS
Poland’s demand for coal is expected to fall by around 7 million tonnes next year, or more than 10% of annual hard coal production, after a d ...
Saturday, 05 September 20
PAKISTAN'S NEW 27-YEAR POWER PLAN RISKS LOCKING IN LONG-TERM OVERCAPACITY, LEAVING IMPORTED COAL AND LNG PLANTS STRANDED - IEEFA
Wind and solar, the country’s cheapest source of new generation, also overlooked
Pakistan risks locking itself into building m ...
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- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- PTC India Limited - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Minerals Council of Australia
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Planning Commission, India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
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