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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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Monday, 10 January 11
DEWA SEEKS ADVICE ON COAL POWER PROJECT -THE NATIONAL
The Dubai utility company gets nine bids from international groups for consultancy role.
The National reported that, Dubai's utility company wil ...
Saturday, 08 January 11
COAL PRICE WILL RISE IN SHORT-TERM DUE TO AUSTRALIA FLOODS - ALBUQUERQUE EXPRESS
Albuquerque Express reported that, Queensland’s mining minister, Stephen Robertson, has warned that the Australian state’s coal mines wi ...
Saturday, 08 January 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 8.69 PERCENT IN JANUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the January 2011 Indonesian Coal Reference Price for thermal ...
Saturday, 08 January 11
SUPRAMAX VESSELS WERE FIXED AT AROUND $ 9000 PD FOR A TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The holiday season affect combined with severe flooding in Queensland ports continues to keep the market and pressure. “Suprama ...
Saturday, 08 January 11
DIFFICULT YEAR FOR SHIPPING - TRANSPORT WEEKLY
Transport Weekly reported that, Shipping Corporation of India (SCI) chairman Sabyasachi Hajara says 2011 will be a difficult year because an excess ...
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- Star Paper Mills Limited - India
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- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
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- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
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- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
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- Jaiprakash Power Ventures ltd
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- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
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- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
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- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
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- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
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- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
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