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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, 15 January 11
SUPRAMAX VESSELS FIXED AROUND $ 8K FOR TRIP VIA INDONESIA TO INDIA - VISTAAR
COALspot.com - The BDI continues to drop and has touched below 1,500 points with the cape index severely affected with the index touching 1,595 poin ...
Saturday, 15 January 11
MAKE SACRIFICES TO SAVE PLN, INDONESIA GOVT BEGS MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Darwin Zahedi Saleh, Indonesia's minister of energy and mineral resources, on Friday appealed to local coal compan ...
Saturday, 15 January 11
RISING PRICES, GOVERNMENT DECREE LEAVE PLN AT LOGGERHEADS WITH COAL FIRMS - THE JAKARTA GLOBE
The Jakarta Globe reported that, As coal prices continue to increase, state utility Perusahaan Listrik Negara faces problems in securing enough coal ...
Thursday, 13 January 11
SURGING COAL PRICES UNDERMINE PLN'S EFFICIENCY PROGRAM - THE JAKARTA POST
The Jakarta Post reported that, The soaring global coal prices are undermining state electricity company PT PLN's pledge to improve its operational ...
Thursday, 13 January 11
SPML INFRA TO DOUBLE INDONESIA COAL MINE OUTPUT IN TWO YEARS - DNA INDIA
DNA India reported that, Kolkata-based infrastructure company SPML Infra, formerly Subhash Projects & Marketing Ltd, will in two years nearly do ...
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- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- PTC India Limited - India
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Planning Commission, India
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
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