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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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Wednesday, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
Monday, 10 January 11
COAL MONGOLIA IS INVITING YOU TO THE INTERNATIONAL COAL SECTOR INVESTORS CONFERENCE
COALspot.com - (Press Release) - The Coal Mongolian Conference will take place at Chinggis Hotel, in Ulaanbaatar on 24-25, Feb 2011. The coal bonanz ...
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- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Australian Coal Association
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
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