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