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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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Thursday, 20 January 11
DRY BULK MARKETS FALL SEES NO END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Pundits indicating that the dry bulk market’s sentiment remains weak were justified, as the industry’s benchmark, the Baltic Dry Index ( ...
Wednesday, 19 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Tuesday, 18 January 11
MINISTRY SEEKS COAL FROM INDONESIA - SUNDAY OBSERVER
Sunday Observer reported that, Ministry of Power and Energy is to explore the possibilities of importing quality coal from Indonesia.
Minister Pa ...
Tuesday, 18 January 11
DRY BULK MARKET HAS BOTTOMED OUT, AS WEATHER IN AUSTRALIA DIALS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has finally halted its plunge, after a devastating week of yet more losses. The industry’s benchmark, the Baltic Dry Index ...
Sunday, 16 January 11
STANCHART GLOBAL RESEARCH SEES COAL PRICE RISING ON SUPPLY DISRUPTION - BURSA MALAYSIA MARKET NEWS
Bursa Malaysia Market News reported that, Standard Chartered Global Research has upgraded its 2011 forecasts for global thermal coal prices based on ...
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- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Bhatia International Limited - India
- The University of Queensland
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
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