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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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- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Deloitte Consulting - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- White Energy Company Limited
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
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