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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, 17 February 11
UNCERTAINTY AND VOLATILITY - FEARNBULK
Handy
Recovering market as evidenced by the solid USD 16k/day achieved by a handymax from Continent to east Med with scrap. More short period requ ...
Tuesday, 15 February 11
INDONESIAN COAL FOR HARYANA THERMAL PLANTS - PUNJAB NEWS LINE
To tide over the recurring coal shortage at thermal plants Haryana Power Generation Corporation Limited (HPGCL) has gone for Malaysian coal for its ...
Tuesday, 15 February 11
TONNAGE OVERSUPPLY TO CHOKE FREIGHT RATES IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In a new report assessing the dry bulk market, BIMCO’s analysis suggests that freight rates for Capesize vessels are likely to remain depresse ...
Sunday, 13 February 11
COAL MARKETS 2011 TO HIGHLIGHT INDONESIAN COAL AND NEW SOURCES OF COAL SUPPLY
“Over 300 senior decision-makers from coal mining, power and trading companies expected to congregate in Singapore”
Press Release - K ...
Sunday, 13 February 11
YEAR OF RABBIT PUSHING FREIGHT MARKET UP
COALspot.com – “The market finally moved up with firmness in all sectors with some positive signs of markets recovering”, said Cap ...
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- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- The University of Queensland
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Planning Commission, India
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
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