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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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Wednesday, 15 December 10
SMALLER DRY BULK VESSELS ARE LOOKING UP, LARGER ONES FAIL TO DELIVER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market lost further ground at the beginning of the week, in what could prove one of the slowest periods ship owners have been faced. Ye ...
Tuesday, 14 December 10
COAL IMPORTS MAY INCREASE 78% TO CHINA, INDIA: ENERGY MARKETS - BUSINESS WEEK
Business Week reported that, China and India may increase imports of coal by 78 percent to 337 million metric tons next year, further driving up pri ...
Tuesday, 14 December 10
BANPU PLANNING PRODUCTION BOOM - BANGKOK POST
Australian, Indonesian output to lead growth
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, wants to nearly double its coal ...
Tuesday, 14 December 10
THE FREIGHT RATES FROM INDONESIA TO INDIA AND CHINA REMAINED FIRM - CAPT. REDDY
COALspot.com - The freight market continued to be soft with the Cape sector most effected which was down by 289 points and closed at 2,694 poi ...
Monday, 13 December 10
ICE FUTURES EUROPE TO LAUNCH IHS MCCLOSKEY INDONESIAN SUB-BITUMINOUS FOB MARKER COAL CONTRACTS - MONDOVISIONE
Mondovisione reported that, IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over ...
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- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Australian Coal Association
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
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