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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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Sunday, 23 January 11
THE AVERAGE CHARTER RATE FOR CAPE SIZE VESSELS WAS AT $ 8,859 PD ALMOST CLOSE TO 2008 LOWS - VISTAAR
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1,370 points. “ In May 2010 the BDI touched ...
Saturday, 22 January 11
POSSIBLE COAL EXPORT RESTRICTIONS ON INDONESIA UNLIKELY TO AFFECT CHURCHILL MINING - PROACTIVE INVESTORS
Proactive Investors reported that, Churchill Mining moved to reassure investors after a fall in its share price, stating that from talks with the au ...
Thursday, 20 January 11
INDONESIA MAY BAN LOW-QUALITY COAL EXPORTS FROM 2014 - BLOOMBERG
Bloomberg reported that, The Indonesian government plans to ban exports of coal with an energy value of less than 5,600 kilocalories a kilogram star ...
Thursday, 20 January 11
SUPRAS ARE DOING USD 7- 8K FOR INDONESIA-INDIA - FEARNBULK
Handy
Negative sentiment for forward positions in the Atlantic market due to lack of cargo availability and too many ballasters from the East. Con ...
Thursday, 20 January 11
ITMG TARGETS TO PRODUCE 25 MILLION TONS OF COAL THIS YEAR - BISNIS INDONESIA
Bisnis Indonesia reported that, Coal producer PT Indo Tambangraya Megah Tbk (ITMG) targets to produce 25 million tons of coal this year, a 13. ...
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- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- MS Steel International - UAE
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
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