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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, 23 December 10
SOUTHGOBI RESOURCES CLOSES STRATEGIC INVESTMENT IN ASPIRE MINING LIMITED
Press Release – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878), announced today that it has completed the private placement with Aspire Mining ...
Thursday, 23 December 10
CESC EYES COAL MINES IN INDONESIA, S AFRICA - TEHELKA
Company has already set a target of adding 6,000 MW power generation by the end of the 12th Plan in 2017
Tehelka reported that, CESC Ltd, the fla ...
Thursday, 23 December 10
SANTA CLAUSE DID NOT COME EARLY THIS YEAR - FEARNBULK
Handy
Not much fresh enquiry this week and quite dead in Bl.Sea/Med. Nevertheless ...
Thursday, 23 December 10
STERLITE ENERGY LIMITED TO BUY 0.6 MLN MT OF COAL FOR 2011
COALspot.com - Sterlite Energy Limited (SEL) is a part of Vedanta Resources plc , a London listed FTSE 100 diversified metals and mining major with ...
Wednesday, 22 December 10
PEABODY ENERGY TO SOURCE INDONESIAN COAL FROM PT SUPRA BARA ENERGI (SBE) - COAL GEOLOGY
Coal Geology reported that, Peabody Energy has entered into an agreement to source coal from PT Supra Bara Energi (SBE), which will be sold on the e ...
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- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- PTC India Limited - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
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