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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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Thursday, 22 November 12
DRY BULK MARKET RISE, BUT OUTLOOK SEEN DIM ON THE BACK OF RECORD NEW BUILDING DELIVERIES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been under hefty pressure since the start of the year, as a result of record newbuilding deliveries and below-par demand for ...
Wednesday, 21 November 12
LITTLE IMPACT FROM DISSOLUTION OF BP MIGAS ON INDONESIAN OIL & GAS COMPANIES - FITCH
Fitch Ratings has said that the recent court order to abolish the Indonesian upstream oil and gas regulator, BP Migas, has minimal immediate impact ...
Wednesday, 21 November 12
ORPHEUS ENERGY SECURES FIRST COAL OFF TAKE CONTRACT
COALspot.com - Orpheus Energy Limited (ASX:OEG) has announced that it has signed a coal sales contract with an Indonesian steel manufacturing compan ...
Tuesday, 20 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 13.18 PERCENT LESS COAL W-W
COALspot.com - Newcastle port in Australia has loaded 2,691,731 MT of thermal and coking coal for week ended 0700 hours 19 November 2012, Newc ...
Monday, 19 November 12
GOVT PREPARES TO FACE ANOTHER SUIT ON MINING LAW - THE JAKARTA POST
The government is gearing up to face a complaint on the 2009 Mining Law prepared by the same organization that previously brought down upstream oil ...
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- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- The University of Queensland
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
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