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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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Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
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