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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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Tuesday, 08 February 11
PUSTAKA JAYA PALU POWER LOOKING FOR 5800 GAD COAL
COALspot.com - According to market information, PT Pustaka Jaya Palu Power, a power plant operator of the Mpanau plant, Palu, Sulawesi has invited c ...
Tuesday, 08 February 11
BAYAN, KANGAROO EXTEND DUE DILIGENCE
Coal miner controlled by businessman Dato' Low Tuck Kwong PT Bayan Resources Tbk (BYAN) and Australia-listed coal company Kangaroo Resources Limite ...
Tuesday, 08 February 11
DRY BULK: IS THE TIDE TURNING? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what could be perceived as a change of market sentiment for the better, the dry bulk industry’s benchmark, the Baltic Dry Index (BDI) poste ...
Monday, 07 February 11
THE INDONESIAN COAL REFERENCE PRICE HAS JUMPED 13.03 PERCENT IN FEBRUARY 2011
COALspot.com - Indonesia’s Ministry of Energy and Mineral Resources has set the February 2011 Indonesian Coal Reference Price for therma ...
Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driv ...
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- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- The University of Queensland
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
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