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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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Tuesday, 23 October 12
INDONESIA SETS DMO FOR NEXT YEAR
COALspot.com - The Indonesian government has declared the quantity of coal to be supplied to domestic market in 2013 recently under DMO regulation. ...
Sunday, 21 October 12
BUMA HAS PRODUCED 25.0 MILLION TONS OF COAL YEAR TO DATE
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 33.2 million bcm* (+5.5% YoY) of Overburden in September 2012 totaled while coal produc ...
Saturday, 20 October 12
SUPRAMAX FREIGHT EXPECTED TO BE FLAT - VISTAAR
COALspot.com - The shipping market continued to be quite active with quite lot of cargoes fixed for in the cape and panamax sector.
The BDI was ...
Thursday, 18 October 12
INDO-INDIA, LARGE ECO SUPRA FIXED AT USD 11000 - FEARNLEYS AS
Handy
Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Cont to East Med were around USD 14k and Black Sea ...
Tuesday, 16 October 12
DRY BULK FREIGHT RATES COULD IMPROVE ON CHINESE STIMULUS AND WINTER CARGO DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO has given out its forecast for the next six weeks, in terms of freight rates for dry bulk carriers. According to them, Capesize TC Average rat ...
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- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Parliament of New Zealand
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
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