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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, 22 December 10
INDONESIAN COAL LOAD PORT WEATHER CONDITION AND DELAYS
COALspot.com - The several leading shipping agents in Indonesia, said due to rainy season in Indonesia, loading activities in coal loading ports hav ...
Wednesday, 22 December 10
COAL INDIA CLOSE TO BUYING 15% STAKE IN AUSTRALIAN MINE - ECONOMIC TIMES
Economic Times reported that, Coal India (CIL) is close to buying a stake between 10% to 15% in an Australian mine owned by Peabody, a US company.
...
Wednesday, 22 December 10
CAPESIZE FUTURES MARKET RATES ARE EXPECTED TO CONTINUE THEIR DRIFT DOWN IN 2011 - BRS
Nearly two months of weekly declines in the Baltic Capesize Index were finally halted last week with a small 1% increase Friday-to-Friday. The impro ...
Wednesday, 22 December 10
DRY BULK MARKET LOOKING FOR DIRECTION AMID HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry&rs ...
Tuesday, 21 December 10
CHINA COAL CAP TO BOOST GLOBAL M&A - FINANCIER WORLD WIDE
Financier World Wide reported that, Chinese state-run media has reported that the Central Government intends to cap domestic coal production for fea ...
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- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
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- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
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- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Planning Commission, India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- The University of Queensland
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
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