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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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Thursday, 30 December 10
DRY BULK MARKET STAYS SUBDUED AT THE END OF 2010 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dy bulk market failed to cheer ship owners across the board as the year draws to an end, thus bringing mixed feelings ahead of 2011. On one hand ...
Thursday, 30 December 10
KANGAROO RESOURCES BUYS INDONESIAN COAL COMPANY
Australian-listed Kangaroo Resources Ltd. said Wednesday it will buy 99% of the Pakar thermal coal project in East Kalimantan, for A$277 million thr ...
Wednesday, 29 December 10
WEATHER IMPACTS RIO TINTO COAL AUSTRALIAS QUEENSLAND OPERATIONS
Press Release - As a result of severe monsoonal rain in central and northern Queensland, force majeure has been declared on coal sales contracts fro ...
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while ...
Monday, 27 December 10
HUNT FOR OVERSEAS COAL ASSETS TO INTENSIFY - FINANCIAL EXPRESS
Financial Express reported that, With the Indian economy back on the track after the slowdown, merger and acquisition (M&A) activities in the re ...
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- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- PTC India Limited - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
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