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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, 09 December 12
LOW DEMAND PUSHES CHARTER RATES TOWARDS DOWN - VISTAAR
COALspot.com - The freight market has softened and BDI, The Baltic Dry Index, a measure of shipping costs for dry bulk goods, plunged below 10 ...
Friday, 07 December 12
A NEW PHASE FOR AUSTRALIAN RESOURCES - A FITCH STREET INTERVIEW
This week Matt Jamieson spoke with Andrew Colquhoun in Fitch's Asian sovereign rating team, and Vicky Melbourne, Fitch's commodity analyst based i ...
Friday, 07 December 12
SHIPPING INDUSTRY LOOKING ON YET ANOTHER TOUGH YEAR AS WE APPROACH 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With shipping finance "on the ropes" as traditional lenders appear to be cutting their losses and tonnage oversupply still the most import ...
Thursday, 06 December 12
PANAMAX : THE POSITIVE VIBES IN THE ATLANTIC REMAINS - FEARNLEYS AS
Handy
The Atlantic market is still depressed with dearth of cargoes and more ships. The trips from Continent to Feast fixed around USD 12k. Trips f ...
Tuesday, 04 December 12
JATENERGY SIGNS MOU FOR INDONESIAN COAL ASSET
COALspot.com - Jatenergy Limited has announced that its fully-owned Indonesian subsidiary, PT Barata Energy (BE), has signed an exclusive, non-bindi ...
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- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
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