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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, 09 December 10
DRY BULK MARKET LOOKING FOR DIRECTION THIS WEEK, AS CAPESIZE SHIPS END THEIR MISFORTUNES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk has began the week on a positive note capitalizing on the positive sentiment which finally prevailed during the last days of the previo ...
Monday, 06 December 10
NTPC MAY OPT FOR INDONESIA OVER AFRICA, OZ FOR COAL MINES
Country's largest power producer NTPC, which is scouting for coal properties abroad to fuel its power plants back home, may zero in on Indonesia fo ...
Saturday, 04 December 10
INDONESIA TO INDIA AND CHINA SEA FREIGHT UP BY ABOUT US$ 2.50 PMT - CAPT. REDDY
COALspot.com - The freight market even though remained weak, but towards end of the week the market seemed to firm up.
The BDI was almost at sam ...
Saturday, 04 December 10
OFF WEST COAST OF INDIA TONNAGE IS SEEMINGLY QUITE SPARSE - FEARNBULK
Handy
The Atlantic markets are weak and remained unusually calm after the Thanksgiving ...
Friday, 03 December 10
INDONESIAN LOW RANK COAL IS ATTRACTING COAL BUYERS FROM INDIA AND CHINA
COALspot.com - Bhakti Energi Persada has sold out its whole coal production until the end of 2011, Jeffry Mulyono said during McCloskey Asia P ...
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- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Parliament of New Zealand
- VISA Power Limited - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
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