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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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Saturday, 15 January 11
SUPRAMAX VESSELS FIXED AROUND $ 8K FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The BDI continues to drop and has touched below 1,500 points with the cape index severely affected with the index touching 1,595 poin ...
Saturday, 15 January 11
MAKE SACRIFICES TO SAVE PLN, INDONESIA GOVT BEGS MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Darwin Zahedi Saleh, Indonesia's minister of energy and mineral resources, on Friday appealed to local coal compan ...
Saturday, 15 January 11
RISING PRICES, GOVERNMENT DECREE LEAVE PLN AT LOGGERHEADS WITH COAL FIRMS - THE JAKARTA GLOBE
The Jakarta Globe reported that, As coal prices continue to increase, state utility Perusahaan Listrik Negara faces problems in securing enough coal ...
Thursday, 13 January 11
SURGING COAL PRICES UNDERMINE PLN'S EFFICIENCY PROGRAM - THE JAKARTA POST
The Jakarta Post reported that, The soaring global coal prices are undermining state electricity company PT PLN's pledge to improve its operational ...
Thursday, 13 January 11
SPML INFRA TO DOUBLE INDONESIA COAL MINE OUTPUT IN TWO YEARS - DNA INDIA
DNA India reported that, Kolkata-based infrastructure company SPML Infra, formerly Subhash Projects & Marketing Ltd, will in two years nearly do ...
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- Wilmar Investment Holdings
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- The University of Queensland
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Eastern Coal Council - USA
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