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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, 25 September 14
LACK OF COAL BUSINESS PUSHING DOWN PANAMAX EARNINGS IN PACIFIC
Handy
In the Atlantic we see rates steady climbing upwards. More coal cargoes out of USG and USEC are helping the TA market which is up some USD ...
Wednesday, 24 September 14
ADARO AGREED TO REDUCE ITS CONCESSION AREA TO 31,379.8 HECTARES
COALspot.com: PT Adaro Energy Tbk (Adaro Energy) today announced that, PT Adaro Indonesia (AI), its wholly owned subsidiary, entered into a M ...
Wednesday, 24 September 14
CAPESIZE: ACTIVITY IN BOTH BASINS WAS UNIMPRESSIVE
COALspot.com: The end of the week prior seems to have marked the tone for the days that followed, with the Dry Bulk market giving up a significant ...
Tuesday, 23 September 14
MEDCO TO INCREASE ITS COAL PRODUCTION NEXT YEAR
COALspot.com: PT Medco Energi Internasional is looking to increase its coal production next year, supported by the launch of operations at its Duta ...
Monday, 22 September 14
COAL SECTOR CHAOS - GENESIS TO REVELATION - DIPESH DIPU
COALspot.com: “Let there be light”, intends the government of India but the fuel side of the story paints a blackout. The recent Suprem ...
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- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Australian Coal Association
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Planning Commission, India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
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