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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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Monday, 27 December 10
RIO TINTO EYES AUSTRALIAN COAL MINER - RTE NEWS
Global resources giant Rio Tinto has made a $3.9 billion bid for Australian coal miner Riversdale.
RTE News reported that, Global resources giant ...
Sunday, 26 December 10
ANGLO SELLS AUSTRALIAN COAL ASSETS - BARCELONA NEWS
Barcelona News reported that, Anglo American has sold off undeveloped Australia coal assets for $577 million.
The global resources giant ha ...
Saturday, 25 December 10
FREIGHT MARKET - LOWEST FIXTURES REPORTED SINCE MID 2009 - CAPT. REDDY
COALspot.com - We wish you a Merry Christmas and a Happy New Year 2011.
The holiday season seems to have severely affected the fr ...
Friday, 24 December 10
CIL SHORTLISTS 21 FIRMS TO IMPORT 250 MT COAL - THE HINDU
The Hindu reported that, Coal India plans to import about 250 million tonnes (mt) over the next 10 years to meet the country's growing requirement. ...
Friday, 24 December 10
DRY BULK OWNERS COULD SOON RECONSIDER SCRAPPING OLDER VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market close to its lowest levels in months and indeed close to 2010 lows, ship owners could be heading towards scrapyards in a bi ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- White Energy Company Limited
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
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