Annual Report 2010 - Verein der Kohlenimporteure eV

producers and consumers. The contract price for hard
coking coal agreed between Australian suppliers and
the Japanese steel industry for the current Japanese
fiscal year (April/March) serves as a benchmark.
However, this practice has changed over the last year or
so. The large coking coal producers have moved away
from the previous system of annual contract prices
to a quarterly price structure. At the same time, first
attempts are being made to establish coking coal price
indices. As a result, spot market elements are having
a greater impact on pricing. American coking coal
producers continue to offer annual prices, while one
other producer wants to switch to monthly prices.
600
500
400
300
200
100
0
1/10
2
(12-12.5 % Ash, spot)
3
4
5
12-12.5 % Ash, spot
Figure 13 Source: China Coal Report and other
6
7
8
9
10
11
12
1/11
2
3
4
Coke prices ex-China still remain very high. ARA
prices in 2010 were substantially lower, but have
however been rising in recent months.
The Baltic Dry Index dropped steadily last year and
before October 2010.
The main reason is fleet overcapacity. This has since
increased even more to the point where even with robust
economic growth, the resulting demand cannot keep
pace with bulk volumes. The collapse is particularly
important for Capesize vessels.
100
90
80
70
60
50
40
30
20
10
0
Freight Rates (capesize) of Hard Coal
(spot) – ARA Ports
USD/t
Richards Bay
Newcastle
Puerto Bolivar
Figure 14 Source: Frachtcontor Junge
Jan
July
Jan
July
Jan
July
Jan
July
Jan
July
Jan
July
Jan
July
Jan
July
Jan
July
Jan
The fleet capacity increase in 2010 was about 16%,
while the volume of bulk goods shipped globally,
according to estimates, only increased by about 10%.
This created a wide gap between supply and demand.
Demurrage situations in Australia, China and Brazil
reduced available capacities, but could not stop the rates
crashing. It is all the more remarkable that despite the
weak market and the unchanged high number of orders
for new builds, more ships are being ordered. In 2010,
138 Capesize, 59 Post-Panamax (95,000 DWT) and 356
Panamax vessels were ordered. In January 2011 alone,
13 Capesize, 5 Post-Panamax and 13 Panamax vessels
were ordered. Against this background, freight rates
might remain very low, within the range 9-12 US$/t for
the benchmark route South Africa – ARA.
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