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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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Wednesday, 26 January 11
DRY BULK MARKET TAKES YET ANOTHER NOSEDIVE, CAPESIZES LOOK RATHER UNATTRACTIVE AT THE MOMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The downturn of the dry bulk market sees no boundariers, disproving even those who thought that at least for the capesize market, the worst had pass ...
Tuesday, 25 January 11
DRY BULK RATES CONTINUED TO TUMBLE LAST WEEK - BRS
With weather-related problems affecting the short-term outlook, and new building deliveries the longer-term picture, dry bulk rates continued to tum ...
Tuesday, 25 January 11
R-POWER TO INVEST $5BN IN INDONESIA - THE TIMES OF INDIA
The Times of India reported that, In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse $5 billio ...
Monday, 24 January 11
GOVT PROMISES COAL FOR PLN DESPITE PRICE SPIKES - THE JAKARTA POST
The Jakarta Post reported that, the government says state electricity company PT PLN will receive enough coal to fire its power plants, despite pric ...
Monday, 24 January 11
DRY BULK MARKETS DOWNTURN SEES NO RELIEF - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept falling for yet another week, with the industry’s benchmark, the Baltic Dry Index (BDI) losing an additional 4.79 ...
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- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- White Energy Company Limited
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
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