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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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- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- GMR Energy Limited - India
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
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