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Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
 The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent retreat from almost 11-year highs is raising the question whether a counter seasonal market drop is in the cards during the 2H of the year in the context of a broader market upcycle.
While the market is multi-factorial with fundamentals, sentiment and inter-freight correlation amongst sizes feeding one another, the current Cape market correction was exacerbated after Chinese authorities intervened to curb iron ore price speculation. A subsequent sharp reversal of iron ore and steel prices from record highs and FFAs selling off contributed to pulling the Cape market lower, while the smaller segments were unaffected. It is well known that Capesize is characterized by the highest freight volatility and even though that we expect volatility to keep up, we are not convinced that this is the turning point for a prolonged market correction. Fundamentals are likely to outlast volatility and we cannot exclude that the next leg higher will find a much higher peak over the next two quarters with cargo export seasonality emerging stronger across all commodities and particularly iron ore.
Iron Ore exports to accelerate in 2H2021; the urge for higher quality iron ore is likely to intensify: China’s iron ore inventories have been destocked by more than 8.0 million tons over the past month amid elevated demand and major iron ore miners running behind their export guidance, likely to trigger a new restocking wave. Forward iron ore prices on the curve, even if spot iron ore prices softened from here, incentivize iron ore miners to accelerate exports during the 2H2021.
So far, China’s emissions regulations on steel production were unsuccessful in containing it. Record high steel mills margins incentivized higher steel production ex. strictly regulated Tangshan with YTD Jan-Apr crude steel production up +15.6% y-o-y. If steel production controls intensify during the second half, this will further increase demand for high quality iron ore, in order to optimize the steel process. In addition, the scrap scramble from steel mills outside China could put a lid on China’s increasing scrap usage in the steel mix in the short term.
Macro indicators continue to be bullish for dry bulk demand in the next quarters: China’s Property new starts - a leading indicator of steel demand – have increased +19.0% YTD in 2021, while April’s y-o-y growth slowed down at +9.3% y-o-y. Any slow down in the growth of new floor space under construction will not immediately translate into lower steel and iron ore demand; developers are likely to accelerate property completions from now on continuing to drive demand.
Other than China, global steel production and demand conditions are robust, reflected by record high steel prices both in the US and Europe. Spot and forward steel prices have surged, giving steel mills the opportunity to hedge at profitable levels, therefore global steel production will continue to expand.
Global manufacturing PMIs are at 10 year cycle highs, despite having softened during April and lead demand for commodities. Oil prices have been lagging the rise in other commodities and are projected to increase significantly over the next two quarters, which could provide further support to the dry bulk market via - and not limited to - the bunker-$ per ton freight- speed relation. Fundamentals of other dry bulk commodities are also robust, with electricity generation set to accelerate over the summer in addition to increased industrial production, while China’s domestic coal production is underperforming amid mine safety checks.
Early signs of credit tightening: Following a record high stimulus over the previous year, latest credit growth figures in China indicate a slow-down in credit supply during April, however as long as inflation at the producers level accelerates the tightening impact is muted in our view. China’s potential deleveraging from here should not be expected to have a negative effect on dry bulk commodities demand, until credit tightening starts to interfere with producers’ profit margins.
Last but not least, China’s political tension with Australia is more likely to translate into higher ton-miles in the medium term, with Atlantic production of high-quality iron ore and coal substituting for any potential loss of Australia’s market share. In the longer term, China’s 14th year plan that calls for an increase of electric arc furnaces (scrap) in steel production to 15-20% by 2025 and self sufficiency share of iron ore above 45% will certainly have an impact in the way iron ore is procured with China having higher control over both supply and iron ore prices.
by Tamara Apostolou,
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Thursday, 27 May 21
KOMIPO INVITED BIDS FOR 1.56 MILLION TONS OF BITUMINOUS COAL
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Thursday, 27 May 21
CHINA POWER DEMAND EXCEEDS PRE-COVID-19 LEVELS; THERMAL OUTPUT STRONG - FITCH RATINGS
Rising Consumption: Total power consumption rose by 21.2% yoy to 1,921.9GWh in 1Q21 due to the fast recovery of China’s economy, after a drop ...
Thursday, 27 May 21
CHINA'S POWER DEMAND EXCEEDS PRE-PANDEMIC LEVELS; RENEWABLES TO DRIVE DEVELOPMENT - FITCH RATINGS
China's power consumption exceeded the pre-Covid-19 levels in 1Q21 due to the country's fast economic recovery, with strong output from the ...
Wednesday, 26 May 21
THE INDONESIA COAL PRICE REFERENCE FOR MAY 2021 SETTLES AT US$ 89.74 PER TON
COALspot.com: The Indonesia coal price reference for May 2021 settles at US$ 89.74 per ton FOB vessel.
The Indonesia coal pric ...
Wednesday, 26 May 21
MARKET INSIGHT - INTERMODAL
Last year crude tankers’ newbuilding contracting activity was devastated by the economic effects of the Covid-19 pandemic and the cloud of un ...
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- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- PTC India Limited - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- The University of Queensland
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
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