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