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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, 16 December 10
LANCO BAGS AUSTRALIAN COAL MINER GRIFFITH - DNA
As part of its strategy to secure coal supplies for meeting its needs in expanding power generation capacities, infrastructure major Lanco Infratech ...
Thursday, 16 December 10
COAL INDIA IN TALKS WITH INDONESIAN CO TO BUY ITS COAL MINES - APN NEWS
APN News reported that, World’s largest coal producer Coal India is in talks with Indonesia’s Sinar Mas Group for acquiring coal mines i ...
Wednesday, 15 December 10
GOVT SETS NEW MINIMUM LEVEL FOR DOMESTIC MARKET SALES - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal producers are required to sell at least 24.17 percent of their production to the domestic market nex ...
Wednesday, 15 December 10
CAPESIZE RATES ARE NOW AT THEIR LOWEST LEVEL SINCE AUGUST
It was a repeat performance for the market this week, with another increase in earnings for the small sizes but a sharp drop for the Capes. Overall ...
Wednesday, 15 December 10
LARGE ORDERBOOK TO HINDER 2011 DRY BULK MARKET REBOUND DESPITE INCREASED DEMAND SAYS PARAGON SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A large orderbook which currently stands at 53% of the existing fleet is expected to render 2011 another challenging year for the dry bulk marke ...
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- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Planning Commission, India
- Bhatia International Limited - India
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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