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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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Thursday, 30 December 10
DRY BULK MARKET STAYS SUBDUED AT THE END OF 2010 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dy bulk market failed to cheer ship owners across the board as the year draws to an end, thus bringing mixed feelings ahead of 2011. On one hand ...
Thursday, 30 December 10
KANGAROO RESOURCES BUYS INDONESIAN COAL COMPANY
Australian-listed Kangaroo Resources Ltd. said Wednesday it will buy 99% of the Pakar thermal coal project in East Kalimantan, for A$277 million thr ...
Wednesday, 29 December 10
WEATHER IMPACTS RIO TINTO COAL AUSTRALIAS QUEENSLAND OPERATIONS
Press Release - As a result of severe monsoonal rain in central and northern Queensland, force majeure has been declared on coal sales contracts fro ...
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while ...
Monday, 27 December 10
HUNT FOR OVERSEAS COAL ASSETS TO INTENSIFY - FINANCIAL EXPRESS
Financial Express reported that, With the Indian economy back on the track after the slowdown, merger and acquisition (M&A) activities in the re ...
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- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
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