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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, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
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- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
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