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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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- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- The University of Queensland
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
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