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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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Sunday, 23 January 11
THE AVERAGE CHARTER RATE FOR CAPE SIZE VESSELS WAS AT $ 8,859 PD ALMOST CLOSE TO 2008 LOWS - VISTAAR
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1,370 points. “ In May 2010 the BDI touched ...
Saturday, 22 January 11
POSSIBLE COAL EXPORT RESTRICTIONS ON INDONESIA UNLIKELY TO AFFECT CHURCHILL MINING - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining moved to reassure investors after a fall in its share price, stating that from talks with the au ...
Thursday, 20 January 11
INDONESIA MAY BAN LOW-QUALITY COAL EXPORTS FROM 2014 - BLOOMBERG
Bloomberg reported that, The Indonesian government plans to ban exports of coal with an energy value of less than 5,600 kilocalories a kilogram star ...
Thursday, 20 January 11
SUPRAS ARE DOING USD 7- 8K FOR INDONESIA-INDIA - FEARNBULK
Handy
Negative sentiment for forward positions in the Atlantic market due to lack of cargo availability and too many ballasters from the East. Con ...
Thursday, 20 January 11
ITMG TARGETS TO PRODUCE 25 MILLION TONS OF COAL THIS YEAR - BISNIS INDONESIA
Bisnis Indonesia reported that, Coal producer PT Indo Tambangraya Megah Tbk (ITMG) targets to produce 25 million tons of coal this year, a 13. ...
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- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Planning Commission, India
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Australian Coal Association
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Parliament of New Zealand
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