Iron Ore news
Chinese iron ore imports are generally expected to slow during the remaining three months of the year. China's nation wide Golden Week holiday is likely to have curbed import demand in the first week of October, and once the slow down to Christmas and the New Year starts, imports are expected to tail off a little. Having said this, a slow down in imports volumes has been expected practically all year, and yet the reporting of a new monthly record has been fairly regularly occurrence. If any sceptic from earlier this year who doubted whether China could sustain these large import volumes are yet to be silenced, may soon find that their scepticism was mistaken.
Global Crude steel production in August was up by 2.5% m-o-m. Almost all of the increase was fuelled by Asia, and particularly in China where steel production was up by 22.9% y-o-y, aided by the government's massive fiscal stimulus package.
Japanese steel production continued its recover on the month, rising by 8.5% m-o-m. Production in the country is still down by 18.3% y-o-y, but this is a stark improvement from the 46.7% y-o-y decline witnessed earlier in the year.
European steel production dipped slightly again in August, by 4.1% m-o-m, although production was not down by as much compared to 2008 as it was in July.
Japan's iron ore imports in August totalled 9.7mt up 14.1% m-o-m, reflecting small improvements in demand, but still down by 12.3% y-o-y. This brought imports during the first eight months of 2009 to 61.6mt, down by 33.8% y-o-y. the small recovery in Japanese iron ore imports now beginning before, and total ore imports in 2009 are expected to reach just 9,6mt.
Coking Coal News
Despite the general global decline in coking coal demand in 2009, BHP Billiton has reported an increase of 1.2mt in production for the year ending 30th June compared to 2008 levels. The increase in Asian demand, primarily focused around China's steep upturn in imports, has provided stimulus for high production levels for the major mining company.
Overall, Australian coking coal exports are projected to decrease by 2,9% y-o-y in 2009 to total 132.8mt. In August China was the destination for 23.0% of Australia's metallurgical coal exports, up from just 1.6% in the same month of 2008. At the same time, Japan accounted for 33.9% of Australia's coking coal exports, down slightly from the 34.9% share it had in the same month last year.
Almost all of Australia's growth this year can be attributed to an increase in Chinese demand.
Australian exports to the world excluding China are down by 27.7% y-o-y.
For another month, the pattern of high Chinese metallurgical coal imports has continued, seaborne imports in August totalling 3.5mt. This figure is slightly down on imports in July, by 20.4% m-om, but still up by a massive 653.8% y-o-y. Chinese seaborne coking coal imports in the year-to-August therefore stand at 19.5mt, up 781.4% y-o-y. In comparison, China's coking coal exports have been virtually non-existant, totalling just 371,487t in the first eight months of the year. This swing from China being a net exporter to a net importer, although not surprisingly as an overall concepts, has been somewhat more dramatically convincing than perhaps expected.
Steam Coal News
South Korea's thermal coal imports for the first eight months of the year totalled 52.2mt, a strong increase of 8.9% y-o-y. Although imports in August were down by 5.9% m-o-m, to 7.mt, this was still the third highest monthly imports volume on record, after July 2009 and June 2008. After a brief drop in industrial production within the country, y-o-y growth rates turned positive in July 2009 and the company began to recover. This return to growth has helped fuel growing power requirements and in turn thermal coal demand.
India's future thermal coal imports were discussed at a conference in Delhi at the start of October, and the general outlook suggested that Indian coal imports look set to expand significantly in the years to come as the country's thermal power expansion plans get underway. India's thermal coal imports are currently projected to reach 43.5mt in 2009 and crow by a further 13.5% y-o-y to reach 49.0mt in 2010, as the country's electricity demand increases.
Clarksons' preliminary projection for 2010 thermal coal trade remains almost unchanged from last month, a recovery to beyond 2008 levels still being expected as developing countries' thermal coal-fired electric generation plants continue. Although there is much pressure on the more developed world to reduce its carbon emissions by using alternative power generation methods, the reality is that any projects approved now are still going to be many years off commencing production.
Grain Trade News
Grain Export News
The IGC currently projects exports from the top five grain exporter to reach 154,9mt in the 2009/10 crop year, down 15.3mt (9.0%) y-o-y.
This means that the top five are expected to control 69.1% of the export market in the year, up from the 68.8% share they controlled in 2008/09. but still substantially down on their 75.6% share in 2007/08.
The US is currently the only top five major exporter for which volumes are expected to increase in the 2009/10 crop year. Exports from the country are projected to increase by 8.1% y-o-y, whilst combined exports from the remaining four are expected to decline by 23.0% y-o-y.