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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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- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- The University of Queensland
- Australian Commodity Traders Exchange
- Australian Coal Association
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
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