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