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Tuesday, 08 April 14
TALKING ABOUT A ONE-HORSE RACE - GEORGE LAZARIDIS
 Ever since the onslaught of the financial crisis, China along with the other BRIICs, have played a pivotal role in supporting global economic growth. A couple of decades ago bulk shipping was mainly reliant on imports from the US, EU as well as other OECD members, whereas countries such as China have now taking top spot on the podium accounting for the lion’s share of seaborne trade, attracting raw materials from all over the world as their appetite for infrastructure development has followed an almost exponential path. Iron Ore, Coal and Crude Oil which together comprise the largest chunk of seaborne trade volumes all rely primarily on Chinese demand nowadays. Chinese imports now account for 38% of global seaborne trade volumes for the 5 major dry bulk commodities, while in some commodities, such iron ore, this percentage is over 69%.
Over the past couple of weeks how ever there has been a storm brewing in the distance, instigated by the growing concerns related to shadow banking in China and the problems it has caused in the real estate sector as well as on the performance of dollar denominated bonds. The non-bank lending that helped homebuilders and property developers fuel part of the nation’s double digit GDP growth over the past decade, is now under threat. What’s more is that this growing threat is more widely spread then just the small scale risky businesses that took up most of these loans, as several prominent companies and banks hold a stake and therefore exposure to any and all defaults that may take place. With the collapse of Zhejiang Xingrun Real Estate Co. earlier this month and Shanghai Chari Solar Energy Science & Technology Co’ s defaulting on its debt more recently, many see more of the around 18 bonds from Chinese developers, which are considered as distressed, taking a similar route. This may well end up being just a small rough patch, however there is a risk that due to these most recent developments we could be facing a considerable tightening of credit in the country and a slowdown of at least most of the small scale development projects. It is interesting to note that home prices in China have risen b y as much as 60% percent since the 4 trillion yuan of fiscal stimulus provided by the government in 2008 and as financial tightening starts to become more of a reality, more and more of the thousands of constructed apartment blocks across the country could start to sit empty, leaving little incentive for further construction and investment from at least the private sector.
All this adding to the already voiced concerns regarding the problems still being faced in the US and Europe, and many are starting to feel less confident as to the path of the global economy and subsequently the growth of international trade this year. There may well be other champions out there amongst the BRIICS, yet countries such as India, which many see as the next in line to take the reins as champions of economic development, are currently now here close to filling up any gap that could be left behind from any waning demand from China. As things stand, China still plays a pivotal role in the growth of seaborne trade and without its support we will likely face a short period of stagnation similar to that of the 90’s. With high hopes having been placed on the performance of the shipping industry this year, it now looks as though it’s may be time to reconsider. Although the order book for most segments has dropped dramatically over the past two years there is a very different threat that needs to be overcome now. The growth in demand that we have been accustomed to over the past years could possibly start to diminish and in the case of slower growth in the seaborne trade of dry bulk commodities such as Iron Ore and Co al, many of the recently placed orders would be entering service to cover a non-existent requirement for extra capacity despite being less of them then in the past.
They way things are for the time being, there seems to be little insight of major trouble surfacing and we are still on tracking for an overall better performance than that of 2013. There are still many who keep a bullish view as to the prospects of the Chinese economy and they may well be right. Nevertheless any “sneeze” like the one noted during early March and the dry bulk freight index takes a no table hit. The problems being faced might no t be of imminent concern but they are there on the horizon and very real. Growth and leverage are currently the main concerns for China and the shipping industry should keep a close eye on both of these as they could spell for considerable trouble down the line if not addressed properly.
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Sunday, 26 January 14
FREIGHT RATES FALL FURTHER ON LACK OF CARGOES - SOLYM CARRIERS
COALspot.com: The freight market has continued to soften further this week with BDI down by 12.31 pct. BDI was closed at 1,246 points week ended 24 ...
Friday, 24 January 14
US COAL PRODUCTION UP 3.9% ON WEEK IN WEEK ENDED SATURDAY - EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.1 million short tons (mmst) of coal in ...
Friday, 24 January 14
DRY BULK MARKET STRUGGLING TO FIND FIRM FOOTING IN START OF 2014 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been faltering since the start of 2014, struggling to hold its ground as low seasonal demand has hindered further growth in ...
Thursday, 23 January 14
PANAMAX : THIS WEEK THE ACTIVITY CAME DOWN DRAMATICALLY - FEARNRESEARCH
Handy
With the Chinese New Year approaching the activity and rate levels are sliding in both hemispheres. Rates in the Atlantic have knocked off so ...
Thursday, 23 January 14
30 DAYS LEFT TO REGISTER FOR PACIFIC BASIN COAL CONFERENCE
COALspot.com: (Press Release) : IHS Inc. (NYSE: IHS), the leading global source of information and analysis, will host the Pacific Basin Coal Confer ...
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- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Planning Commission, India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
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