Posts Tagged China
Dry Bulk Weekly – July 24, 2010
Posted by Belisarius in Commodities, Dry Bulk Weekly on July 24, 2010
Baltic dry index rose 6.2% last week; Capesize Index gained 1.9%; Panamax Index rose 12.9%; Supramax and Handysizes Indexes gained 4.6% and 3.6% respectively.
Commodore Research July 21, 2010:
One of the most troubling signs in the Chinese economy at the moment is therecent (and relatively long-lasting) decline in steel prices. Steel prices have fallen consistently since theend of April, even while stockpiles and production levels have remained firm. In recent weeks, though,steel output has decreased moderately but has remained at historically robust levels. Last week’s declinein steel prices was one of the smallest week-on-week declines since April, however, and steel prices maybe on the verge of finding support.
Dry Bulk Weekly – July 18, 2010
Posted by Belisarius in Commodities, Dry Bulk Weekly on July 18, 2010
Baltic dry index fell 9.6% last week; The hardest hit were Capesizes with 20.3% loss; Supramaxes and Handysizes and lost 8.1% and 5.9%; Panamaxes gained 7.6%.
Spot cargo demand fell last week, looks like everybody’s playing wait and see game. Nothing that could reverse the losses on the horizon.
Chart 1. Baltic Dry Indexes Relative Performance
Source: Bloomberg
Chart 2. Baltic Dry Index
Source: Bloomberg
Chart 3. Baltic Dry Index Components
Source: Bloomberg
Baltic Dry Index At 1700, Down 0.5%
Posted by Belisarius in China, Commodities on July 15, 2010
Down only 0.5%.
Chart 1. Baltic Dry Index
Source: Bloomberg
China Growth Slowing Down
Posted by Belisarius in China on July 15, 2010
China Q2 GDP growth was reported at 10.3%, slowing down from Q1 growth rate of 11.9%. The slowdown came despite exports were stronger in Q2, meaning internal demand has weakened.
Chart 1. China GDP Quarterly Growth¸
Source: Bloomberg
Urban fixed assets investments growth rate also slowed down to 23.5%. The May reading was at 25.9%.
Chart 2. Fixed Assets Investment
Source: Bloomberg
Baltic Dry Index At 1709, Down 4.5%
Posted by Belisarius in China, Commodities, Markets on July 14, 2010
As I wrote in Dry Bulk Weekly it appears that Chinese removal of steel export tax rebates is a complete game changer for the industry. The slowdown in Chinese iron ore imports is easing port congestion which tied approximately 20% of the world fleet a few weeks ago. The port congestion has since then eased by a third. New-building deliveries were also strong in the first half of the year. All this has change the dry bulk demand/supply balance really fast. It’s hard to imagine a recovery in rates with this kind of fundamentals setup.
Chart 1. Baltic Dry Index
Baltic Dry Index At 1790, Down 2.7%
Posted by Belisarius in China, Commodities on July 13, 2010
Again down…
Chart 1. Baltic Dry Index
Source: Bloomberg
Dry Bulk Weekly – July 11, 2010
Posted by Belisarius in China, Commodities, Dry Bulk Weekly on July 11, 2010
Baltic dry index fell 16.6% last week; The hardest hit were Panamaxes with 20.6% loss; Capesizes lost 20.0% ; Handysizes and Supramaxes lost 10.3% and 8.9%.
Chinese tax rebates on hot-rolled coil and some cold-rolled coil and galvanized products will be removed starting July 15. This makes Chinese steel exports uncompetitive and it is moving the markets. Chinese steel mils now have to choose whether to reduce capacity and cost or go bankrupt.
Both steel and iron ore prices are falling due to the removal of tax rebates. Forward steel curve for some steel grades in China has moved to backwardation (spot prices higher than future prices). So, I suppose they have to liquidate inventory (and they have plenty of it) at fire-sale prices.
Baltic Dry Index At 1902, Down 2.0%
Posted by Belisarius in China, Commodities, Markets on July 9, 2010
Again down… Brake-even for shipowners is around 2.200, so most of of the shipping companies are losing money at this levels.
Chart 1. Baltic Dry Index
Source: Bloomberg
Dry Bulk Weekly – July 4, 2010
Posted by Belisarius in Commodities, Dry Bulk Weekly, Markets on July 4, 2010
Baltic dry index fell 8.8% last week; The hardest hit were Panamaxes with 19.6% loss; Supramaxes lost 6.0% ; Handysizes and Capesizes lost 5.4% and 3.3% .
It looks like the Baltic Dry Index was not bottoming last week after all. Panamaxes which were more stable sector than the Capsize sector played catchup and collapsed. That was not the case in the corrections during the last year or so, do we could have different kind of weakness this time.
The available shipping capacity is piling up and according to broker views we could see further losses. Analyst reports on the other hand argue that we are seeing Chinese steel mills cutting capacity as falling steel prices have squeezed profit margins bringing a temporary slowdown in demand.
China Manufacturing PMI’s For July Turned Lower
Posted by Belisarius in China on July 1, 2010
The official China PMI fell from 53.9 to 52.1; The HSBC/Markit PMI fell from 52.7 to 50.4.
From the China National Bureau of Statistics press release:
Economic growth is moderating, a rebound in exports is weakening, and slower domestic demand is leading to a build-upof finished-goods inventories.
Industrial production is entering a “light season” and the output of heavy energy users such as metal and oil processers contracted last month.
My comment is not needed if the China official agency says that.
Chart 1. China Federation of Logistics & Purchasing and National Bureau of Statistics PMI / HSBC Markit China Manufacturing PMI