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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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Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
Wednesday, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
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- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- The University of Queensland
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Planning Commission, India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
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