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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, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
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- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- PTC India Limited - India
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
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