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