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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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Tuesday, 16 September 14
INDONESIAN GOVERNMENT DECLARED HBA SUFFERED ANOTHER SETBACK IN SEPTEMBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in September. HBA for ...
Tuesday, 16 September 14
INDONESIAN COAL OUTPUT WON'T EXCEED 421M TONS: GOVT - JP
The government is optimistic that it will meet its coal production target for this year, which caps nationwide production at a flat number compared ...
Monday, 15 September 14
CHINA'S COAL PROPOSALS LEAVE SOME HOPE FOR EXPORTERS - DAILY NEWS
When the best thing you can say about new policies is that they aren’t as bad as they could have been, then you know your industry is in deep ...
Monday, 15 September 14
SUB-BIT FOB INDONESIA COAL SWAP, JANUARY 2015 DELIVERY GAINED DAY ON DAY AND WEEK ON WEEK
COALspot.com: Indonesian coal swaps for average October 2014 increased US$ 0.40 (+0.78%) day on day and US$ 0.55 (+1.08%) per mt week on week. The ...
Monday, 15 September 14
CFR SOUTH CHINA COAL SWAP GAINED DAY ON DAY AND WEEK ON WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 2.30 (-3.36%) month over month, but increased day on day a ...
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- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Minerals Council of Australia
- Central Electricity Authority - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- PTC India Limited - India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
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