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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, 08 February 11
PUSTAKA JAYA PALU POWER LOOKING FOR 5800 GAD COAL
COALspot.com - According to market information, PT Pustaka Jaya Palu Power, a power plant operator of the Mpanau plant, Palu, Sulawesi has invited c ...
Tuesday, 08 February 11
BAYAN, KANGAROO EXTEND DUE DILIGENCE
Coal miner controlled by businessman Dato' Low Tuck Kwong PT Bayan Resources Tbk (BYAN) and Australia-listed coal company Kangaroo Resources Limite ...
Tuesday, 08 February 11
DRY BULK: IS THE TIDE TURNING? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what could be perceived as a change of market sentiment for the better, the dry bulk industry’s benchmark, the Baltic Dry Index (BDI) poste ...
Monday, 07 February 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 13.03 PERCENT IN FEBRUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the February 2011 Indonesian Coal Reference Price for therma ...
Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driv ...
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- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- PTC India Limited - India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Planning Commission, India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
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