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Thursday, 06 December 12
STRONG CHINESE DEMAND FOR DRY BULK COMMODITIES EXPECTED FOR 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A new analysis from BIMCO released yesterday suggests that 2013 is expected to be a stronger year in terms of China's "hunger" for commodities like iron ore and coal, which are the main products that larger dry bulk vessels are carrying. According to BIMCO's Chief Shipping Analyst, Peter Sand, "as we are heading into 2013, iron ore demand from the world’s largest consumer, China, is likely to provide a solid lift in demand alongside coal imports in Asia. BIMCO forecast Chinese iron ore imports to grow at a rate of 7.5% in 2013 up from 6.4% in 2012, driven by higher steel demand and the cost of the lower quality domestic ore.”
Statistical data seems to support this prediction. In September China imported the largest amount of iron ore since the record-high imports in January 2011. The 65.01 million tons imported in September strengthens the latest indication of a still growing Chinese demand for imported iron ore. A slight drop in the Chinese steel production from August shows that domestic miners grapple with a low iron content. "While imported iron ore has an average iron content of 63%, the stagnating steel production in China indicated that the implied iron content of domestic ore went south of 10% in September. The average iron content for Chinese iron ore is 14% for 2012. The iron content of Chinese iron ore is calculated residually utilising data on steel production, iron ore production, imports and port inventories. BIMCO calculations show that the Chinese iron ore content has declined since early 2008. This is good news for the dry bulk market, as it implies that the real costs of using domestically produced iron ore has increased" the report said.
It added that "the calculations provide a monthly forecast for iron ore imports, but the overview of the total iron ore input to the steel industry, domestically produced as well as imported is best seen on a quarterly basis where also the falling quality of the domestic ore is highlighted. It is this issue that presents a strong case for growing imports going forward at the expense of domestic production alongside a general growth in steel demand".
BIMCO expects that the monthly imports of iron ore in China will reach an average of 61 million tons in 2012. That number is expected to be higher next year, with a projection of 65 million tons of iron ore monthly. Aside from the declining quality of domestic iron ore, the demand driver for iron ore imports is the continued economic development in China, recently refuelled by the RMB 1 trillion infrastructure investment plans by the Chinese government.
Using a seasonally-adjusted linear expression, we estimate the following development in iron ore imports. The seasonal adjustment is done comparing a 3-month moving average for iron ore imports to a 12-month moving average. The seasonal factor is multiplied by the linear expression to acquire a number for iron ore imports.
As a consequence of the 7-day National Day holiday in early October, a drop in the Chinese steel production led to a fall in iron ore imports that month. According to BIMCO, "we expect imports to grow by a little more than 3 million tons in both November and December, making our 2012 estimate to be 730 million tons for Chinese iron ore imports – or 6.4% year-over-year. For 2013, BIMCO expect that China will increase their imports to 785 million tons – equal to 7.5% year-over-year. Translated into number of vessels, the iron ore import growth this year gives work to 39 Capesize vessels, with work for another 49 Capesize vessels in 2013 (estimating a Capesize that carries iron ore from Australia (2/3) and Brazil (1/3) can transport its cargo capacity 6.8 times a year). The majority of imported iron ore comes from Australia and Brazil. Out of the 57.6 million tons imported in July, more than half came from Australia and around one quarter came from Brazil, according to UN Comtrade. CRSL reports that in week 44, it cost USD10.35 to transport one ton of iron ore from Australia to China, while it cost USD22.45 to transport a ton of iron ore from Brazil to China.
This is still a long way from the happy days of 2008, where ship owners were paid USD50 to transport one ton of iron ore from Australia to China, and as much as USD107 per ton from Brazil to China. As it stands, the Chinese appetite for iron ore ensures that Capesize earnings should stay above an average of USD 9,000 per day in 2013. The reason for this being the positive outlook for iron ore demand as well as expected continuously higher demand for power generation in China and India. In the medium run, coal is likely to be the main contributing factor in boosting the demand side of the dry bulk sector. As laid out in the most recent BIMCO Shipping Market Overview & Outlook, October 2012, imported thermal coal volumes to the three top buyers are expected up by as much as 10%. In the short run, spot rates for transportation of coal may suffer a hit, as stockpiles remain at very high levels up 49% y-o-y, leaving little desire for more coal imports right now, but the stockpile effect may be partially offset by an upwards trend in electricity production as winter is approaching. “When we look into 2013, the fundamentals of the dry bulk segment are improving on both supply and demand side variables. We are still having a tonnage overhang but as we see global GDP improve, demand for dry bulk tonnage is also set to increase driven by surging demand for iron ore and coal. This development should ease the pressure on ship owners and operators” concluded Peter Sand.
Source: Nikos Roussanoglou, Hellenic Shipping
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Friday, 08 February 13
NORTH P&I CLUB WARNS OF LIQUEFACTION RISK FOR BAUXITE CARGOES
The ‘A’ rated 170 million GT North P&I club has warned shipowners carrying bauxite aluminium ore cargoes that they have the potentia ...
Thursday, 07 February 13
CHINA NDRC APPROVED 10 BILLION YUAN POWER GENERATION PROJECTS
NDRC of China currently announced that some of power grid and power station in Jiangxu, Sichuan and Anhui Province would be newly constructed or ext ...
Thursday, 07 February 13
CAPESIZE : MORE ACTIVE WEEK IN THE PACIFIC - FEARNLEYS AS
Handy
The Atlantic market remained stable with no significant movement in rates. Rates from USG to FEast were around USD 18k and Black Sea to Feast ...
Thursday, 07 February 13
WEAK STEEL MARKET MEANS IRON ORE RALLY LIKELY TO END SOON - FITCH
The sharp rebound in iron ore prices over the last couple of months will hurt margins at non-integrated steel producers in the first quarter of 2013 ...
Tuesday, 05 February 13
THE SHIPPING SECTOR IS " NAVIGATING IN STORMY WATERS" - PWC
The vulnerabilities of the global economy have been exposed and have more than played their part in making 2011 one of the worst years of shipping i ...
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- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
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