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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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Sunday, 06 January 13
FREIGHT MARKET REMAINED FAIRLY STEADY - VISTAAR
WISH YOU ALL HAPPY NEW YEAR
COALspot.com - The freight market remained fairly steady in spite of Christmas / New Year Holidays. The BDI was almos ...
Saturday, 05 January 13
THE SHIPPING MARKET IN 2012 AND LOOKING FORWARD - BIMCO
Global Economy: Things will go up from here
The global economy continues to grow, albeit at a slower pace than previous years. The slower economic ...
Friday, 04 January 13
DRY BULK MARKET LOOKING FOR DIRECTION IN FIRST TRADING DAYS OF THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is actively looking for its footing at the start of the New Year, as charters have been scarce, as is usually the case during th ...
Thursday, 03 January 13
INDONESIAN SUB-BITUMINOUS COAL SWAPS CLOSED US$ 6.86 HIGHER FOR 2014 DELIVERY
COALspot.com - Swaps prices were changed positively for thermal coal for loading in the first quarter from Indonesia, according to SGX AsiaClear OTC ...
Thursday, 03 January 13
SUPRMAX FREIGHT RATE FROM RED SEA / INDIA IS AROUND MID TEENS - FEARNLEYS
Fearnleys in its weekly report said that, Indian market was very quiet in respect of export of iron ore. For Indo-India trip Supra rate was hovering ...
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- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Australian Coal Association
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
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