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