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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, 08 January 11
AUSTRALIAN FLOODS MAY BOOST RIS COAL SALES - THE JAKARTA POST
The Jakarta Post reported that, Floods inundating Queensland have disrupted Australian coal production, and in turn may offer opportunities for Indo ...
Saturday, 08 January 11
GOVERNMENT REMAINS CAUTIOUS OVER FOREIGN INVESTMENT IN MINING SECTOR - THE JAKARTA GLOBE
The Jakarta Globe reported that, The government expects $3.2 billion of investment to flow into the mining sector this year as foreign investors tur ...
Friday, 07 January 11
14 LARGE-SCALE COAL BASES TO BE BUILT DURING 12TH FIVE-YEAR PLAN - GLOBAL TIMES
During the Twelfth Five-Year Plan period (2011-2015), China aims to build 14 large-scale coal bases, and annex and restructure 20 coal bases in orde ...
Friday, 07 January 11
JSW ENERGY LTD OF INDIA IS LOOKING FOR 45 MILLION TONS OF STEAM COAL FOR 25 YEARS
COALspot.com - Supply of 1.80 mmt (+/- 10%) of steam coal per annum for power plants at Toranagallu and Jaigad.
Accordign to JSWE's websit ...
Friday, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
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- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- The University of Queensland
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Planning Commission, India
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Parliament of New Zealand
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- GMR Energy Limited - India
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
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