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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, 16 December 10
LANCO BAGS AUSTRALIAN COAL MINER GRIFFITH - DNA
As part of its strategy to secure coal supplies for meeting its needs in expanding power generation capacities, infrastructure major Lanco Infratech ...
Thursday, 16 December 10
COAL INDIA IN TALKS WITH INDONESIAN CO TO BUY ITS COAL MINES - APN NEWS
APN News reported that, World’s largest coal producer Coal India is in talks with Indonesia’s Sinar Mas Group for acquiring coal mines i ...
Wednesday, 15 December 10
GOVT SETS NEW MINIMUM LEVEL FOR DOMESTIC MARKET SALES - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal producers are required to sell at least 24.17 percent of their production to the domestic market nex ...
Wednesday, 15 December 10
CAPESIZE RATES ARE NOW AT THEIR LOWEST LEVEL SINCE AUGUST
It was a repeat performance for the market this week, with another increase in earnings for the small sizes but a sharp drop for the Capes. Overall ...
Wednesday, 15 December 10
LARGE ORDERBOOK TO HINDER 2011 DRY BULK MARKET REBOUND DESPITE INCREASED DEMAND SAYS PARAGON SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A large orderbook which currently stands at 53% of the existing fleet is expected to render 2011 another challenging year for the dry bulk marke ...
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- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- The Treasury - Australian Government
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- PTC India Limited - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
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