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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, 15 December 10
SMALLER DRY BULK VESSELS ARE LOOKING UP, LARGER ONES FAIL TO DELIVER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market lost further ground at the beginning of the week, in what could prove one of the slowest periods ship owners have been faced. Ye ...
Tuesday, 14 December 10
COAL IMPORTS MAY INCREASE 78% TO CHINA, INDIA: ENERGY MARKETS - BUSINESS WEEK
Business Week reported that, China and India may increase imports of coal by 78 percent to 337 million metric tons next year, further driving up pri ...
Tuesday, 14 December 10
BANPU PLANNING PRODUCTION BOOM - BANGKOK POST
Australian, Indonesian output to lead growth
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, wants to nearly double its coal ...
Tuesday, 14 December 10
THE FREIGHT RATES FROM INDONESIA TO INDIA AND CHINA REMAINED FIRM - CAPT. REDDY
COALspot.com - The freight market continued to be soft with the Cape sector most effected which was down by 289 points and closed at 2,694 poi ...
Monday, 13 December 10
ICE FUTURES EUROPE TO LAUNCH IHS MCCLOSKEY INDONESIAN SUB-BITUMINOUS FOB MARKER COAL CONTRACTS - MONDOVISIONE
Mondovisione reported that, IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over ...
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- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Anglo American - United Kingdom
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
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