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Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
 The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent retreat from almost 11-year highs is raising the question whether a counter seasonal market drop is in the cards during the 2H of the year in the context of a broader market upcycle.
While the market is multi-factorial with fundamentals, sentiment and inter-freight correlation amongst sizes feeding one another, the current Cape market correction was exacerbated after Chinese authorities intervened to curb iron ore price speculation. A subsequent sharp reversal of iron ore and steel prices from record highs and FFAs selling off contributed to pulling the Cape market lower, while the smaller segments were unaffected. It is well known that Capesize is characterized by the highest freight volatility and even though that we expect volatility to keep up, we are not convinced that this is the turning point for a prolonged market correction. Fundamentals are likely to outlast volatility and we cannot exclude that the next leg higher will find a much higher peak over the next two quarters with cargo export seasonality emerging stronger across all commodities and particularly iron ore.
Iron Ore exports to accelerate in 2H2021; the urge for higher quality iron ore is likely to intensify: China’s iron ore inventories have been destocked by more than 8.0 million tons over the past month amid elevated demand and major iron ore miners running behind their export guidance, likely to trigger a new restocking wave. Forward iron ore prices on the curve, even if spot iron ore prices softened from here, incentivize iron ore miners to accelerate exports during the 2H2021.
So far, China’s emissions regulations on steel production were unsuccessful in containing it. Record high steel mills margins incentivized higher steel production ex. strictly regulated Tangshan with YTD Jan-Apr crude steel production up +15.6% y-o-y. If steel production controls intensify during the second half, this will further increase demand for high quality iron ore, in order to optimize the steel process. In addition, the scrap scramble from steel mills outside China could put a lid on China’s increasing scrap usage in the steel mix in the short term.
Macro indicators continue to be bullish for dry bulk demand in the next quarters: China’s Property new starts - a leading indicator of steel demand – have increased +19.0% YTD in 2021, while April’s y-o-y growth slowed down at +9.3% y-o-y. Any slow down in the growth of new floor space under construction will not immediately translate into lower steel and iron ore demand; developers are likely to accelerate property completions from now on continuing to drive demand.
Other than China, global steel production and demand conditions are robust, reflected by record high steel prices both in the US and Europe. Spot and forward steel prices have surged, giving steel mills the opportunity to hedge at profitable levels, therefore global steel production will continue to expand.
Global manufacturing PMIs are at 10 year cycle highs, despite having softened during April and lead demand for commodities. Oil prices have been lagging the rise in other commodities and are projected to increase significantly over the next two quarters, which could provide further support to the dry bulk market via - and not limited to - the bunker-$ per ton freight- speed relation. Fundamentals of other dry bulk commodities are also robust, with electricity generation set to accelerate over the summer in addition to increased industrial production, while China’s domestic coal production is underperforming amid mine safety checks.
Early signs of credit tightening: Following a record high stimulus over the previous year, latest credit growth figures in China indicate a slow-down in credit supply during April, however as long as inflation at the producers level accelerates the tightening impact is muted in our view. China’s potential deleveraging from here should not be expected to have a negative effect on dry bulk commodities demand, until credit tightening starts to interfere with producers’ profit margins.
Last but not least, China’s political tension with Australia is more likely to translate into higher ton-miles in the medium term, with Atlantic production of high-quality iron ore and coal substituting for any potential loss of Australia’s market share. In the longer term, China’s 14th year plan that calls for an increase of electric arc furnaces (scrap) in steel production to 15-20% by 2025 and self sufficiency share of iron ore above 45% will certainly have an impact in the way iron ore is procured with China having higher control over both supply and iron ore prices.
by Tamara Apostolou,
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
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 reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 02 December 22
INDONESIAN COAL PRICE REFERENCE PLUNGE TOWARD US$ 281.48 A TON AS DEMAND DROPS WORLDWIDE
COALspot.com: The cost of coal is falling so fast that it is beginning to put real money back in the pockets of end-users.
Indonesia ...
Wednesday, 30 November 22
INDONESIA’S BUMI RESOURCES TARGETS 2023 COAL OUTPUT OF 80 MLN TONNES - REUTERS
Indonesian coal miner PT Bumi Resources Tbk BUMI.JKis eyeing a 10% increase in output to 80 million tonnes next year amid expectations for more fav ...
Wednesday, 30 November 22
TANKERS: LONGER HAULS TO SUPPORT CONTINUED STRENGTH - BIMCO
Highlights
A rebound in the dirty tanker trade has led the Baltic Exchange Dirty Index (BDTI) to increase by 64% since our last report from mid ...
Wednesday, 30 November 22
MARKET INSIGHT - INTERMODAL
Shipping, although a conservative and innovation adverse industry, is currently in a transition period of digital transformation. According to a su ...
Tuesday, 29 November 22
INDIA TO RECEIVE FIRST LNG CARGO FROM INDONESIA’S TANGGUH LNG - REUTERS
India will receive its first cargo from Indonesia’s Tangguh liquefied natural gas (LNG) plant at the Dahej terminal on Monday, according to a ...
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- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Australian Coal Association
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- The University of Queensland
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
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