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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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Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
Friday, 28 January 11
MPM SEEKS 40K TONS OF INDONESIAN COAL
An Indian paper producer Mysore Paper Mills Ltd., based in Bangalore is looking for 40,000 metric tons of non-coking coal of Indonesian o ...
Friday, 28 January 11
TRADING PERMIT DELAYS THREATEN EXPORTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, an ongoing wrangle over licenses for mining traders could hurt investment, a coal mining association chief said on ...
Friday, 28 January 11
DRY BULK MARKET CLOSING IN TOWARDS CRISIS LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The trials and tribulations of the dry bulk market seem to have no end during the first month of 2011, as the industry’s benchmark, the Baltic ...
Wednesday, 26 January 11
ADANI TO SET-UP RAIL, PORT AND POWER PROJECTS IN INDONESIA - MONEYCONTROL
Moneycontrol reported that, Adani Enterprises, the flagship company of India’s infrastructure conglomerate the Adani Group, today announced th ...
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- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- The University of Queensland
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
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