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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, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
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- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
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