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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, 22 February 11
SUPRAMAX MARKET IS IMPROVING IN THE PACIFIC
BRS - A 10% rise in the BDI this week, mostly on the back of Panamax rates and improvements in the Supramax market in the Pacific. For the Capes, ra ...
Monday, 21 February 11
CHURCHILL MINING RECEIVES SIGNIFICANT INTEREST, PROPOSALS TO DEVELOP EAST KUTAI COAL PROJECT - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining has received a number of specific proposals to fund and develop its massive East Kutai coa ...
Monday, 21 February 11
ABOLISH 5% DUTY ON COAL IMPORTS: SHINDE
Indian Express reported that, with acute coal shortage of domestic coal threatening to destabilise its power generation plans, the power ministry ha ...
Saturday, 19 February 11
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market was quite firm this week with freight rates in South east asia and India/Feast almost up by 30 pct.
However towards end ...
Thursday, 17 February 11
COAL-GEN EUROPE 2011 REAFFIRMS THE IMPORTANCE OF COAL
Press Release: The third COAL-GEN Europe conference and exhibition, kicked off on Tuesday 15 February, with leading experts, professionals and compa ...
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- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- GMR Energy Limited - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
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