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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, 13 December 10
NALCO TO START WORK ON RS 18K CR ($ 4,010,695,091) INDONESIAN PROJECT BY JUNE - MSN
MSN reported that, State-owned NALCO today said it has selected UAE-based RAK Minerals as JV partner for its Rs 18,000 crore (US$ 4,010,695,091 ...
Monday, 13 December 10
DEUTSCHE BANK RAISES COAL FORECASTS ON MARKET SHORTAGE - BLOOMBERG
Deutsche Bank AG raised price forecasts for thermal coal by as much as 17 percent on expectations that a shortage of the fuel will widen over the ne ...
Monday, 13 December 10
K SERA SERA TO SPEND RS325CR TO BUY COAL,OIL & GAS FIRMS STAKE - LIVE MINT
The company might have to dole out around Rs 225 crore (US$ 50,122,522) for picking up the majority stake in the coal mine in Indonesia and around R ...
Thursday, 09 December 10
OVERSUPPLY OF SHIPS BOUND TO KEEP DRY BULK FREIGHT RATES SUBDUED DURING 2011 SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
An oversupply of vessels is expected to keep freight rates from flying as high as in recent years said a relative shipping report from BIMCO’s ...
Thursday, 09 December 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 103.41 PMT FOR DECEMBER DELIVERY
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
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- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Australian Coal Association
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- PTC India Limited - India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
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