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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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Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
Wednesday, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
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- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Planning Commission, India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Australian Coal Association
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- MS Steel International - UAE
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- The University of Queensland
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- GMR Energy Limited - India
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