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Wednesday, 15 January 20
PREDICTIONS FOR 2020: 'SLOWBALISATION" IS THE NEW GLOBALISATION - PWC
 Projecting what the future holds is an important exercise for businesses looking to plan ahead. Below we present a summary of some of the themes we assess will likely prevail in the global economy in 2020.
Trading goods across borders will likely remain tense…: A defining feature of the global economy since at least the 1970’s has been globalisation—the bringing together of economies predominantly via more liberal trade flows. The global volume of merchandise traded slowed down dramatically and even went in reverse in 2019 in contrast to a 21st century average growth rate of about 3.4% per annum*. Also, in December 2019 the World Trade Organization’s (“WTO”) dispute settlement mechanism was effectively disbanded. We expect this trend to continue in 2020 and for trade tensions in the global goods market to persist. This means that we assess globalisation is likely give way to ‘slowbalisation’ i.e. continued integration of the global economy via trade, financial and other flows but albeit at a significantly slower pace. Large businesses with sophisticated supply chains spread across the world should therefore plan for a variety of scenarios, some of which have not been experienced in recent history.
…but global services trade expected to hit US$7 trillion: One aspect of trade that is often neglected is trade in services, which is now about one third of the size of the global volume of merchandise trade. In contrast to goods, services remain largely unaffected from tariff wars. The latest 2018 data from the International Trade Centre (“ITC”) shows that the global export of services was worth about US$5.8 trillion, or around 3.5% of global GDP. We expect the total value of services exported to hit a record US$7 trillion by 2020. Assuming historic trends continue, the US and UK are likely to remain the first and second largest exporters of services in the world in US Dollar terms. But in yet another reminder of the shift of the centre of economic power from the West to the East we expect China to overtake France in 2020 and become the world’s fourth largest services exporter.
Global economy is expected to grow at a modest pace: Figure 1 shows that growth in merchandise trade flows and the global economy have been intrinsically linked. In our main scenario for 2020, we expect the global economy to expand at a rate of around 3.2% in purchasing power parity (“PPP”) terms which is below the 21st century average of 3.8% per annum. In our main scenario, we expect all of the major economies to grow, buoyed, in part, by accommodative financial conditions. US economic activity is likely to expand by around 2%, in line with its potential rate. Given the historically low unemployment rate, US employers, however, find it increasingly difficult to hire staff. Across the pond, the Eurozone is expected to grow at approximately half that rate (i.e. around 1%). Germany, and other economies that are sensitive to global trade flows, to become more reliant on household consumption as a source of growth instead of net exports and investment. For Germany, however, this could be challenging as households tend to save more than the European average. In the emerging world, we expect the Chinese economy to expand by less than 6%– but it can still add the equivalent of Saudi Arabia to the world economy in one year. The world’s six other largest emerging economies, including Turkey, should also grow in this scenario, with India leading the way.
Predictions for 2020
More jobs across the board but not necessarily spread equitably
We expect the G7 to continue to create jobs, to the tune of around 2 million. Four out of the five new jobs in the G7 will be created in the US, UK and Japan. As the pool of labour resources in the G7 gradually dries up, we assess earnings should continue their upward trajectory. But in the absence of productivity improvements, corporate profit margins could be squeezed. Similarly, the International Labour Organization (“ILO”) expects the seven largest emerging economies– the E7–to create about 8 million jobs in net terms. There are some exceptions to this– Russia and China are likely to experience a shrinking workforce because of demographic pressures. Finally, the ILO’s employment projections for the G7 show that jobs are likely to be taken up by men and women in equal measure. Within the E7, however, the ILO expects job creations to be less evenly distributed across genders.
India expected to rise in global economic rankings
According to the IMF’s latest estimates, 2019 was the year when India overtook the UK and France to become the fifth largest economy in the world. This is an ongoing process with India likely on current trends to overtake Germany before 2025 and Japan before 2030 to become the world’s largest economy behind China and the US. France and the UK will likely now vie for sixth place in the rankings, with their relative position dependent on the value of the pound against the euro which may remain volatile in 2020.
Germany may need to choose between ‘lower for longer’ interest rates or higher fiscal spending
The US is expected to run a US$1.2 trillion government deficit. The Eurozone, which is about the same size as the US economy will run a government deficit about 1/10 the size of the US. In fact, we expect almost half of the Eurozone member states to run a government budget surplus in 2020. Cyprus, Luxembourg and Germany are expected to run the largest surplus relative to their economic size while France and Italy are expected to be on the opposite end of the spectrum with continuing budget deficits. Germany is likely to come under renewed pressure to either increase its government spending or accept ‘lower for longer’ interest rates (see Figure 3). Further afield, of the Gulf Cooperation Council (“GCC”) countries, we only expect Qatar to run a government surplus in 2020. This could mean more policy action in the future to balance government budgets across the GCC.
US oil production expected to hit record levels
Global renewable energy and nuclear consumption will likely make up more than 20% of global energy consumption, which is the highest it has ever been. The rise of renewable energy reflects how businesses, households and governments are adapting and changing their attitudes. China is expected to be the largest consumer of this type of energy closely followed by Europe. However, oil is expected to continue to remain the most preferred source of energy in 2020 for the world economy followed by coal and natural gas. The US and China will almost certainly remain the largest consumers of oil in the world in 2020. In so far as the extraction and supply of oil (and other liquid forms of energy) is concerned the US may surpass the monthly 13 million barrels per day (“b/d”) threshold. To set into context, in the US crude oil was extracted at a rate of 5.5 million b/d 10 years ago.
Global population biggest it has ever been but also the greyest
According to the United Nations (“UN”), In 2020, the world’s population is expected to reach 7.7 billion, which is around a 10% increase compared to a decade ago. China, India and SubSaharan Africa are expected to drive around half of the world’s annual population increase. At the same time, the number of people above the age of 60 globally is expected to surpass the one billion mark. China is expected to have a larger number of people above the age of 65 than all the six other largest emerging economies put together. This calls into question how policymakers respond to this trend and fund future health and social care. This could also be an opportunity for businesses in advanced economies, who have been dealing with such issues for decades. In relative terms i.e. the proportion of people above the age of 65 relative to the country’s entire population, Japan is expected to remain the ‘greyest’ country in the world and Niger is expected to be the youngest.
Source: PWC
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Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
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- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- The University of Queensland
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
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