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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, 15 October 12
IT'S STRICTLY COME CHARTERING - CLARKSON RESEARCH SERVICES
The charter market is a bit of a dance between ship owner and charterer: one leader, one follower; one step, two steps, turn... The dance is symbiot ...
Sunday, 14 October 12
SUB-BIT INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS: SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery lost 0.329 percent w- w but gained 0.248 percent d-d on Friday, 12 Oct ...
Sunday, 14 October 12
SUPRAMAX FREIGHT STEADY: PANAMAX FREIGHTS FIRM - VISTAAR
COALspot.com - The shipping market saw some hectic activity in the Cape and panamax sector and quite a lot of fixtures reported.
The BDI was up b ...
Friday, 12 October 12
HOW REAL IS THE THREAT OF PIRACY? - BIMCO
The threat of modern piracy remains serious, regardless of its seasonal variations and the fact that it is chiefly confined to the Indian Ocean, Gul ...
Friday, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
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- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- White Energy Company Limited
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Australian Coal Association
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
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