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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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Thursday, 17 February 11
UNCERTAINTY AND VOLATILITY - FEARNBULK
Handy
Recovering market as evidenced by the solid USD 16k/day achieved by a handymax from Continent to east Med with scrap. More short period requ ...
Tuesday, 15 February 11
INDONESIAN COAL FOR HARYANA THERMAL PLANTS - PUNJAB NEWS LINE
To tide over the recurring coal shortage at thermal plants Haryana Power Generation Corporation Limited (HPGCL) has gone for Malaysian coal for its ...
Tuesday, 15 February 11
TONNAGE OVERSUPPLY TO CHOKE FREIGHT RATES IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In a new report assessing the dry bulk market, BIMCO’s analysis suggests that freight rates for Capesize vessels are likely to remain depresse ...
Sunday, 13 February 11
COAL MARKETS 2011 TO HIGHLIGHT INDONESIAN COAL AND NEW SOURCES OF COAL SUPPLY
“Over 300 senior decision-makers from coal mining, power and trading companies expected to congregate in Singapore”
Press Release - K ...
Sunday, 13 February 11
YEAR OF RABBIT PUSHING FREIGHT MARKET UP
COALspot.com – “The market finally moved up with firmness in all sectors with some positive signs of markets recovering”, said Cap ...
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- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Bhatia International Limited - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
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