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