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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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Sunday, 23 September 12
INDIA IMPORTED 11.40 PERCENT MORE INDONESIAN COAL IN AUGUST
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 26,451,565* tons of coal in August 2012, compared to 27.88* mill ...
Saturday, 22 September 12
SOFT BUNKER PRICES KEEP INDONESIA TO INDIA FREIGHTS STABLE - VISTAAR
COALspot.com - The freight market overall remained buoyant with all indices up except for Panamax index. The main effect seems to be increased shipm ...
Friday, 21 September 12
SHIP BREAKING ACTIVITY REACHES NEW RECORDS, AS ALREADY 2012 LEVELS HAVE SURPASSED THE WHOLE OF 2011 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The vast oversupply of vessels, most notably in the dry bulk shipping sector, has forced ship owners to intensify their efforts towards recycling th ...
Thursday, 20 September 12
SUPRAMAX : INDO-INDIA ROUNDS WERE AROUND USD 12K - FEARNLEYS
Handy
Not a bad week for Supramax tonnage, if we compare Supramax developments to the bigger size tonnage. The rates have basically remained unchan ...
Thursday, 20 September 12
DRY BULK INCHES FORWARD AFTER WEEKS OF BELOW PAR PERFORMANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has started to revive from its ashed, as the past couple of days, traders have reported an increased activity from China, result ...
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- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Economic Council, Georgia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Mercuria Energy - Indonesia
- PTC India Limited - India
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