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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, 23 December 10
SOUTHGOBI RESOURCES CLOSES STRATEGIC INVESTMENT IN ASPIRE MINING LIMITED
Press Release – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878), announced today that it has completed the private placement with Aspire Mining ...
Thursday, 23 December 10
CESC EYES COAL MINES IN INDONESIA, S AFRICA - TEHELKA
Company has already set a target of adding 6,000 MW power generation by the end of the 12th Plan in 2017
Tehelka reported that, CESC Ltd, the fla ...
Thursday, 23 December 10
SANTA CLAUSE DID NOT COME EARLY THIS YEAR - FEARNBULK
Handy
Not much fresh enquiry this week and quite dead in Bl.Sea/Med. Nevertheless ...
Thursday, 23 December 10
STERLITE ENERGY LIMITED TO BUY 0.6 MLN MT OF COAL FOR 2011
COALspot.com - Sterlite Energy Limited (SEL) is a part of Vedanta Resources plc , a London listed FTSE 100 diversified metals and mining major with ...
Wednesday, 22 December 10
PEABODY ENERGY TO SOURCE INDONESIAN COAL FROM PT SUPRA BARA ENERGI (SBE) - COAL GEOLOGY
Coal Geology reported that, Peabody Energy has entered into an agreement to source coal from PT Supra Bara Energi (SBE), which will be sold on the e ...
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- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
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