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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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- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- White Energy Company Limited
- Thiess Contractors Indonesia
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
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