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Wednesday, 01 October 14
FITCH: GLOBAL ECONOMY FACES MULTI-SPEED RECOVERY, MULTIPLE RISKS
 Fitch Ratings says in its latest Global Economic Outlook (GEO) that global growth will pick up in 2015 and 2016, but risks are weighted to the downside. The contribution of major advanced economies (MAEs) to global expansion will gradually increase, while growth will remain subdued in emerging markets (EMs) after the cyclical trough this year. Fitch’s latest forecasts for world GDP growth (weighted at market exchange rates) are 2.6% in 2014, accelerating to 3% in 2015 and 3.1% 2016.
The 2014 and 2015 forecasts are both 0.1pp lower than in the June GEO. The downward revisions, similar to previous quarters, are mainly due to emerging markets. For the US economy Fitch maintains its forecast of robust GDP growth of 3.1% in 2015 and 3% in 2016, up from 2.2% in 2014. The economy rebounded strongly in 2Q14 after a temporary setback in 1Q14. Private consumption growth is underpinned by improving household income, wealth and confidence.
Investment should be supported by high corporate cash piles and profitability, low financing costs, rising confidence and capacity utilisation. Monetary policy remains highly accommodative and the drag from fiscal consolidation is significantly smaller than it was in 2013. We forecast eurozone GDP growth of 0.9% in 2014, followed by 1.3% in 2015 and 1.5% in 2016, slightly weaker than in the June GEO. Output stagnated in 2Q14 following four quarters of insipid growth, due primarily to a sharp slowdown in Germany.
Over the forecast horizon growth will be supported by the US and UK recoveries, euro depreciation, ECB policy loosening and an easing in the pace of fiscal consolidation. However, faltering recent outturns suggest deleveraging and structural constraints remain formidable headwinds, eroding potential benefits from improving external conditions or policy stimulus. High unemployment will persist and remain above 11% until 2016. Fitch’s base case is for eurozone inflation to be low at 0.5% in 2014, 1% in 2015 and 1.3% in 2016, but for protracted deflation to be avoided. However, current low inflation, weak demand, a decline in market inflation expectations, policy challenges and the potential for self-reinforcing dynamics make deflation a meaningful and rising risk.
We forecast EM growth to slow sharply from 4.7% in 2013 to 4% in 2014, before recovering somewhat in 2015-16. Looming US monetary policy tightening, geo-political tensions and lower commodity prices pose downside risks. Brazil is now in recession and Russia close to it. Fitch expects both to see only a subdued recovery in 2015 and 2016, underperforming most MAEs over the forecast period.
Fitch expects China’s GDP growth to moderate to 7.2% in 2014, 6.8% in 2015 and 6.5% in 2016 as it gradually rebalances while seeking to contain leverage. India will be the only BRIC country where growth picks up in 2014 to 5.6% and accelerates further to 6.5% in 2015 and 2016, owing to an expected improvement in the business environment.
The underlying momentum of the Japanese economy is uncertain after sharper-than-expected contraction in 2Q14. We have revised down GDP growth to 1.4% in 2014, from 1.6% previously, and are maintaining our forecast of 1.3% for 2015 and 2016. Higher wage growth is central to Japan’s prospects of achieving sustainably higher real and nominal GDP growth. Growth in the UK has been strong and broad-based. Fitch is maintaining its forecast that growth will slow from 3% in 2014 to 2.5% in 2015 and 2.3% in 2016, as it moves to its medium-term potential rate of 2%-2.25%.
The base case is that nominal wage growth will pick up as the labour market slack is absorbed and the currently weak productivity growth will improve, in line with previous cyclical recoveries. The coming quarters will see increasing divergence of monetary conditions in MAEs after six years of synchronised, ultra-loose monetary stance.
Fitch expects the Fed and Bank of England to start gradually tightening policy over the next few quarters. Meanwhile, the ECB announced further easing measures at its September meeting and the Bank of Japan is continuing with its qualitative and quantitative easing strategy. The ECB and Bank of Japan are likely to keep interest rates unchanged until at least 2016. This GEO edition’s alternative scenario explores the global impact of a US interest rate shock. In this scenario the Federal Funds rate increases to 5% and the ten-year US yield reaches 6% by end-2016, triggered by an initial inflation shock as the economy runs out of spare capacity much sooner than policy makers and the markets currently expect.
Furthermore volatility spikes in global financial markets and leads to a 150 bps increase in global risk premium. Growth slows sharply in the US from mid-2015 and the economy stagnates in 2016. According to the simulation results the impact on MAEs is limited and stems mainly from lower US demand. Nevertheless the shock raises the risk of a new recession in the eurozone as the baseline recovery is so weak. In many EMs, central banks tighten monetary conditions due to the higher risk premium and inflation, despite the economic slowdown. Russia and Brazil would remain close to recession in 2015 and 2016, while India would slow sharply and China would be the least affected among the BRICs.
Source: Fitch Ratings
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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Economic Council, Georgia
- The University of Queensland
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
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