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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, 12 January 11
BULKER DELIVERIES WEIGHING IN ON FREIGHT RATES KEEPING SENTIMENT ON A NEGATIVE MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A flurry of new buildings still hitting the water has caught up for good with the freight market, with capesizes unable to weather the storm. With r ...
Tuesday, 11 January 11
SUPRAMAX TRIP VIA INDONESIA TO INDIA US$ 8,000 PER DAY
Despite continued growth in the bulk trades, the delivery of new vessels is beginning to take its toll. The BDI continued its decline, finishing las ...
Tuesday, 11 January 11
DRY BULK MARKET REACHES NEW LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s benchmark index, the Baltic Dry Index (BDI) lost further ground in the beginning of the week, following the trend of the ...
Monday, 10 January 11
MINING INVESTMENT TARGET TOO LOW - TEMPO INTERACTIVE
TEMPO Interactive reported that, the Indonesian Mining Association’s executive director, Priyo Pribadi, believes the government’s invest ...
Monday, 10 January 11
COAL MONGOLIA IS INVITING YOU TO THE INTERNATIONAL COAL SECTOR INVESTORS CONFERENCE
COALspot.com - (Press Release) - The Coal Mongolian Conference will take place at Chinggis Hotel, in Ulaanbaatar on 24-25, Feb 2011. The coal bonanz ...
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- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Australian Coal Association
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
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