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