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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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Thursday, 20 January 11
DRY BULK MARKETS FALL SEES NO END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Pundits indicating that the dry bulk market’s sentiment remains weak were justified, as the industry’s benchmark, the Baltic Dry Index ( ...
Wednesday, 19 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Tuesday, 18 January 11
MINISTRY SEEKS COAL FROM INDONESIA - SUNDAY OBSERVER
Sunday Observer reported that, Ministry of Power and Energy is to explore the possibilities of importing quality coal from Indonesia.
Minister Pa ...
Tuesday, 18 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Sunday, 16 January 11
STANCHART GLOBAL RESEARCH SEES COAL PRICE RISING ON SUPPLY DISRUPTION - BURSA MALAYSIA MARKET NEWS
Bursa Malaysia Market News reported that, Standard Chartered Global Research has upgraded its 2011 forecasts for global thermal coal prices based on ...
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- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Australian Coal Association
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