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Monday, 22 August 11
MACRO ECONOMICS - PETER SAND BIMCO / HELLENIC SHIPPING
 The US is jeopardising the global recovery as job creation remains top challenge across the board.
Global economy: While growth in most emerging and developing economies continues to be strong, slowdowns caused by the devastating earthquake and tsunami in Japan, weaker than expected activity in the US and shocks to oil supply weighed on the global expansion in the second quarter of the year, the IMF said recently.
The most influential negative surprise was the upsetting effects of the earthquake and tsunami on the Japanese economy, with supply chain disruptions weighing heavily on industrial production, and consumer sentiment and spending in the world’s 3rd largest economy and beyond.
Meanwhile, GDP growth in the Eurozone, driven by Germany and France, has been better than the IMF expected, but concerns about the depth of fiscal challenges in some European countries and the US have triggered renewed heavy financial volatility.
This ongoing financial turmoil has created a delicate moment for the global economy, and the crisis is not over until advanced economies are creating enough jobs again, according to the OECD.
The organisation also points out that there is some concern that if downside risks reinforce each other, their cumulative impact could weaken the recovery significantly, possibly triggering stagflation in some advanced economies. Despite the negative surprises, global growth attained an annualized rate of 4.3% in Q1 2011. But the mild not very comforting. What should calm this turbulence and bridge the gap to a more steady global economy? Public stimuli from governments across the globe, which should have held up economic growth until private consumption had run out. This has happened prior to a re-emergence of a self-sustained economic environment where consumers once again strongly push demand and growth forward. The markets cry out for decisive action, but politicians hesitate and refrain from dealing with this challenge as they are about to run out of tools and fear a new era of inflation. However, doing nothing only makes things worse. Who are we to rely on?
By mid-June, IMF adjusted 2011 World GDP growth downwards and inflation upwards in the direction of stagflation. Having said that, there are still some unlikely ways to go before the recovery turns that sour.
Commodity prices, mainly food and oil, have been on the rise most of the year generating inflationary pressure in mainly emerging and developing economies. Meanwhile, the problem in some advanced economies is the opposite – that is deflation and fears of a deflationary spiral where lower prices lead to lower production, which in turn leads to lower wages and lower demand – which in turn leads to even lower prices.
US:Poor second quarter GDP growth in the US unfortunately proved that the so-called “soft patch” is not disappearing easily as its expected temporary status is getting closer to permanent. The growth number came in at 1.3% as compared to Q1 growth of 0.4%. US manufacturing ISM disclosed this development with the steep drop in May and soft comeback in June. ISM for July came in at 50.9 signalling that Q3 could be tough too.
On the (temporarily) positive side – the US debtlimit has been elevated by a last-minute compromise.
A US default would have put more obstacles in the way for US and global recovery than we are already challenged by today. The uncertainty surrounding the US debt ceiling negotiations meant, amongst other things, that the Dol high.
Since the turn of the year the EUR/USD cross exchange rate has gone from 1.34 to peak at 1.48 at the end of April. Since then, the cross rate has hovered around its current level at 1.44. (Follow the EUR/USD cross exchange rate via your MyBIMCO profile)
Being a political much more than an economic crisis, the problems created by this domestic political battle have been far-reaching, and developed an unnecessary uncertainty about the US’ ability to pay its dues as well as its future direction for economic development.
Asia: China’s official manufacturing PMI fell in July for four months in a row to a 29-month low of 50.7, down 0.2 from June. Also the HSBC/Markit manufacturing PMI, focusing more on smaller private companies, dropped in July. Actually it dropped below the 50 point threshold, signalling that the economy is no longer expanding. Sustained domestic fiscal tightening and weak foreign demand are the reasons behind this new low-point. A closer reading of the underlying components such as new orders in the official PMI suggests that a “soft landing” is more likely than a “hard landing”.
This may, in turn, translate into a bottoming out at current level of the manufacturing PMI and thus also the underlying industrial production. GDP growth to remain strong at current manufacturing levels, with second quarter GDP growth at 9.5%
As inflation is still high on the agenda in China, the central bank is unlikely to change its course due to developments in 2011. Monetary policy has been contractive to handle growth and inflation and another round of austerity measures cannot be ruled out for the second half of the year, despite the recent slowdown on key export markets as well as domestically.
Despite the upward adjustment of GDP growth for 2011 by the IMF, Europe is continuously haunted by the unsustainable economic situation in Greece, Spain, Portugal, Ireland and Italy. Following the passing of essential getback- on-track bills by the Greek Parliament, the financial markets started to breathe almost normally for a while as focus shipped toward the other side of the pond by the debt-ceiling issue in the US. But shortly after that was settled, the financial markets reacted strongly again to the overall uncertain financial situation on both sides of the Atlantic.
Outlook: Looking ahead in China, domestic demand is set to continue to be boosted by the local governments’ strong efforts to build public housing and China’s export growth should be supported by rising demand from the emerging economies. Rising demand from advanced economies is likely to remain subdued in coming months.
Japan is clawing its way back towards normality but the road remains bumpy and challenging. Both in terms of normal living and in terms of economic recovery the challenges are clear and present. This is hurtful in Japan and beyond.
As a US default on payments is no longer a short term threat to the US, the US Dollar could gain some strength against the Euro. In the medium term, the threat to the US economy – and subsequently the global economy – is whether the planned budget savings are severe enough to avoid another credit downgrading and the subsequent political uncertainty. Moreover, employment growth and GDP growth is set stay too weak to create a powerful and sustainable economy in the coming months.
Following the 2 million barrels per day for one month release from IEA oil reserves, oil prices have moved sideways. The move was made to rebalance supply with demand in respond to the disruptions in the availability of oil due to the shortfall of Libyan output and to put a damper on oil price inflation as it drags down pace of the much needed global recovery. The move to release IEA oil stocks has only happened twice before. 1) In the build up to the Gulf War in 1991 and 2) after Hurricanes Katrina and Rita damaged offshore oil rigs, pipelines, and refineries in the Gulf of Mexico in 2005.
The absence of major OPEC increases of oil supply to the market prompted the move by IEA, due to a real possibility that commercial stocks could fall to the bottom of their seasonal range, risking a renewed damaging and sustained surge in oil prices in Q3 and Q4.
Source : Peter Sand Bimco / Hellenic Shipping
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Friday, 29 July 11
5300 ADB COAL WILL BE AT US$ 60/TON IN THIS QUARTER - RAIN
COALspot.com - PT Resource Alam Indonesia Tbk (KKGI) seeing the average selling price of its coal for the third quarter of this year will increase t ...
Thursday, 28 July 11
PTBA'S COAL PRICES UP IN H1 2011
COALspot.com - Bukit Asam’s coal prices in the second half of 2011 will expected to be higher than the first half of this year, said Sukrisno, ...
Thursday, 28 July 11
RESOURCE ALAM 1H PROFIT SURGES 208 PERCENT
Indonesia's tenth largest coal miner in term of concessions, PT Resource Alam Indonesia (KKGI), part of Rain Group, today reported a skyrocket net ...
Thursday, 28 July 11
DRY BULK MARKET EDGES FURTHER DOWN ON ADDED PRESSURE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Baltic Dry Index (BDI), an indicator of dry bulk freight rates has reached new lows this week, with yesterday’s session ending further dow ...
Wednesday, 27 July 11
BLACKSTONE TO INVEST INR 5,000 MILLION (APPRX. US$ 111 MILLION) IN VISA POWER
Press Release - The Blackstone Group (NYSE: BX) today announced that it will be investing INR 5,000 million (c. USD 111 million) in VISA Power ...
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- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- The University of Queensland
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Australian Coal Association
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
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