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