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