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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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Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Wednesday, 12 May 21
U.S. COAL PRODUCTION TO INCREASE BY 43 MMST IN 2021 TOTAL 582 MILLION SHORT TONS - EIA
U.S. energy Information Administration expects U.S. coal production to total 582 million short tons (MMst) in 2021, 43 MMst (8%) more than in 2020. ...
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- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Minerals Council of Australia
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
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