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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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Saturday, 27 September 14
MORE COAL MINERS AGREE TO AMEND CONTRACTS - THE JAKARTA POST
The Energy and Mineral Resources Ministry is in a rush to beat a deadline for the conclusion of numerous memorandums of understanding (MoUs) with t ...
Friday, 26 September 14
INDIA SUPREME COURT RULING TO HIT STEEL, UTILITY EARNINGS, SAYS FITCH
COALspot.com: The 24 September Supreme Court of India (SCI) decision to cancel almost every coal block allocation since 1993 will have a negative f ...
Friday, 26 September 14
U.S WEEKLY COAL PRODUCTION FELL 1.8% WEEK OVER WEEK, SAYS EIA
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.80 million short tons (mmst) of c ...
Friday, 26 September 14
ORACLE SIGNS EPC FRAMEWORK AGREEMENT WITH SEPCO FOR COAL MINE AND POWER PLANT IN PAKISTAN
COALspot.com: Oracle Coalfields PLC, the UK developer of a lignite coal mine and power plant in the south-eastern Sindh Province, Pakistan, has ann ...
Friday, 26 September 14
NEWCASTLMAXES ARE THE MOST SOUGHT AFTER VESSELS BY SHIP OWNERS TODAY SAYS VESSELS VALUE
KNOWLEDGE TO ELEVATE
Determining a ship’s fair value can be a very tricky business, especially when you’re the one paying. As such ...
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- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
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