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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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Friday, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
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- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Parliament of New Zealand
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Australian Coal Association
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
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