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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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Monday, 19 November 12
IHS MCCLOSKEY ASIA PACIFIC COAL OUTLOOK CONFERENCE 2012
With the current global oversupply of thermal coal showing no signs of abating and spot prices falling to a two-year low, concerns are growing that ...
Sunday, 18 November 12
INDONESIAN SUB BITUMINOUS COAL SWAPS FOR JANUARY 2013 DELIVERY GAINS 1.29 PERCENT WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for January 2013 delivery gains 1.29 percent WoW and 0.25 percent DoD on Friday, 16 Novembe ...
Saturday, 17 November 12
THE SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA ARE EXPECTED TO BE UP NEXT WEEK - VISTAAR
COALspot.com - This week market sentiments ended positive with all the segments ending higher except for handy size which was almost at same levels ...
Saturday, 17 November 12
RECORD DEMOLITION ACTIVITY SEEKS TO CURB TONNAGE OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
This year will prove to be another record-breaker in terms of scrapping of older vessels across all shipping segments, as the equally feverish pace ...
Friday, 16 November 12
SHIP OWNERS KEEP ON INVESTING IN SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Priced attractively, modern and with prompt delivery dates, second hand vessels are proving to be rather popular among cash-rich ship owners these d ...
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- Intertek Mineral Services - Indonesia
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- Timah Investasi Mineral - Indoneisa
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- Indonesian Coal Mining Association
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- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
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- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Parliament of New Zealand
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- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
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- White Energy Company Limited
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- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
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