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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, 26 January 11
DRY BULK MARKET TAKES YET ANOTHER NOSEDIVE, CAPESIZES LOOK RATHER UNATTRACTIVE AT THE MOMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The downturn of the dry bulk market sees no boundariers, disproving even those who thought that at least for the capesize market, the worst had pass ...
Tuesday, 25 January 11
DRY BULK RATES CONTINUED TO TUMBLE LAST WEEK - BRS
With weather-related problems affecting the short-term outlook, and new building deliveries the longer-term picture, dry bulk rates continued to tum ...
Tuesday, 25 January 11
R-POWER TO INVEST $5BN IN INDONESIA - THE TIMES OF INDIA
The Times of India reported that, In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse $5 billio ...
Monday, 24 January 11
GOVT PROMISES COAL FOR PLN DESPITE PRICE SPIKES - THE JAKARTA POST
The Jakarta Post reported that, the government says state electricity company PT PLN will receive enough coal to fire its power plants, despite pric ...
Monday, 24 January 11
DRY BULK MARKETS DOWNTURN SEES NO RELIEF - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept falling for yet another week, with the industry’s benchmark, the Baltic Dry Index (BDI) losing an additional 4.79 ...
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- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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