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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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Monday, 13 December 10
NALCO TO START WORK ON RS 18K CR ($ 4,010,695,091) INDONESIAN PROJECT BY JUNE - MSN
MSN reported that, State-owned NALCO today said it has selected UAE-based RAK Minerals as JV partner for its Rs 18,000 crore (US$ 4,010,695,091 ...
Monday, 13 December 10
DEUTSCHE BANK RAISES COAL FORECASTS ON MARKET SHORTAGE - BLOOMBERG
Deutsche Bank AG raised price forecasts for thermal coal by as much as 17 percent on expectations that a shortage of the fuel will widen over the ne ...
Monday, 13 December 10
K SERA SERA TO SPEND RS325CR TO BUY COAL,OIL & GAS FIRMS STAKE - LIVE MINT
The company might have to dole out around Rs 225 crore (US$ 50,122,522) for picking up the majority stake in the coal mine in Indonesia and around R ...
Thursday, 09 December 10
OVERSUPPLY OF SHIPS BOUND TO KEEP DRY BULK FREIGHT RATES SUBDUED DURING 2011 SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
An oversupply of vessels is expected to keep freight rates from flying as high as in recent years said a relative shipping report from BIMCO’s ...
Thursday, 09 December 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 103.41 PMT FOR DECEMBER DELIVERY
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
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- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Australian Coal Association
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
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