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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, 09 December 12
LOW DEMAND PUSHES CHARTER RATES TOWARDS DOWN - VISTAAR
COALspot.com - The freight market has softened and BDI, The Baltic Dry Index, a measure of shipping costs for dry bulk goods, plunged below 10 ...
Friday, 07 December 12
A NEW PHASE FOR AUSTRALIAN RESOURCES - A FITCH STREET INTERVIEW
This week Matt Jamieson spoke with Andrew Colquhoun in Fitch's Asian sovereign rating team, and Vicky Melbourne, Fitch's commodity analyst based i ...
Friday, 07 December 12
SHIPPING INDUSTRY LOOKING ON YET ANOTHER TOUGH YEAR AS WE APPROACH 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With shipping finance "on the ropes" as traditional lenders appear to be cutting their losses and tonnage oversupply still the most import ...
Thursday, 06 December 12
PANAMAX : THE POSITIVE VIBES IN THE ATLANTIC REMAINS - FEARNLEYS AS
Handy
The Atlantic market is still depressed with dearth of cargoes and more ships. The trips from Continent to Feast fixed around USD 12k. Trips f ...
Tuesday, 04 December 12
JATENERGY SIGNS MOU FOR INDONESIAN COAL ASSET
COALspot.com - Jatenergy Limited has announced that its fully-owned Indonesian subsidiary, PT Barata Energy (BE), has signed an exclusive, non-bindi ...
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- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- MS Steel International - UAE
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
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