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