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Speaker notes available on request Commodity Trade Patterns                   prospects for the dry bulk sector   Sector &...
Changing Patterns in Seaborne Trade     100%                                                                              ...
Dry Bulk Trade 1992-2012 (seaborne)        Iron ore                                                              Dry Bulk ...
Economic Development of Countries                                  60,000    Size bubble = crude steel use per capita (kg)...
China & India Urbanization Process (2011)Today, 50% of world population lives in urban areas                              ...
China & India Urbanization Process (2025-30)By 2025, more than 60% of world population lives in urban areas               ...
Current Wheat Trade Flows                               % = share in global wheat trade (figures 2010/2011)               ...
Current Coking Coal trade flows                                  % = share in global coking coal trade                    ...
Current Steam Coal Trade Flows                                 % = share in global steam coal trade                       ...
Production Growth in Coal Across the Globe       Increase production hard coal 2009-2035                                  ...
Current Iron Ore Trade Flows                               % = share in global iron ore trade                             ...
New Iron Ore Project Developments until 2014* Minor selection of total green- and brownfield projects worldwide           ...
Country Dependency on Iron ore & Coal                                           • Basis: share in world imports 2011      ...
To conclude on Dry Bulk Trade Patterns   1,200                                                 60%             1,200      ...
Further Information & Disclaimer For question and further information, please contact:                                 Cas...
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Commodity trade patterns outlook october 30th 2012

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Commodity trade patterns outlook october 30th 2012

  1. 1. Speaker notes available on request Commodity Trade Patterns prospects for the dry bulk sector Sector & Commodity ResearchCasper BurgeringSenior sector economist 31 October 2012
  2. 2. Changing Patterns in Seaborne Trade 100% 13% 28% 90% 80% 70% 60% 52% 50% 73% 40% 30% 20% 20% 10% 0% 14% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Coal, iron ore, grains import into EU Coal, iron ore, grains import into Asia Coal, iron ore, grains import into OthersData in figure based on trade of iron ore, coal and wheat (= 60% of total dry bulk trade) Global seaborne trade patterns changed significantly in 20 years} Imports into Asia increased strongly by 274% in 20 yrs (cagr 14% pa)} Iron ore and coal seaborne trade main drivers of growth Source: Clarkson Research Services, ABN AMRO Sector & Commodity Research
  3. 3. Dry Bulk Trade 1992-2012 (seaborne) Iron ore Dry Bulk Trade 1992: Steam coal Other Iron ore Steel products 7% 21% Wheat Coking coal AgriForest products related Agribulks 32% Scrap Metals Bauxite Steam related Fertiliser coal 27% Cement 13% Soyabeans Anthracite Dry Bulk Trade 2012: Nickel ore Other Iron orePetroleum coke 10% 28% Sugar AgriPhosphate rock related Pig iron 21% Coke Other Steam Metals coal related 0 200 400 600 800 1,000 1,200 20% 21% 1992 (volume in mln tonnes) 2012 (volume in mln tonnes) Source: Clarkson Research Services, Metal Bulletin, ABN AMRO Sector & Commodity Research
  4. 4. Economic Development of Countries 60,000 Size bubble = crude steel use per capita (kg) (see value near or in bubble) 292 US 50,000 Germany 248 Netherlands Japan 539 40,000 500 239 France 163 Italy 459 UK 30,000 335 Spain 40% of world GDP per capita (USD) 20,000 population Russia 298 10,000 China 323 147 South Turkey Brazil India 45 445 Africa 97 5 Indonesia high 0 6 medium 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% low Urbanisation ratio (%) high medium low Source: IISI, Worldbank, OECD
  5. 5. China & India Urbanization Process (2011)Today, 50% of world population lives in urban areas India 2011: Population: 1,189,000,000 Srinagar Urban people: 357,000,000 Jammu Urbanisation rate: 30% Amristar Simla Chandigam Ludhiana Heilongjiang Itanagar Dehli New Dehli Kathmandu Siliguri Jilin Inner Jaipur Agra Lucknow Ledo Sillong Mongolia Jodhpur Kanpur Liaoning Patna Kohima Xinjiang Allahabad Gwalior Imphal Dhambad Beijing Agartala Ashansol Tianjin Varanasi Aizawl Gandhinagar Howrah Hebei Kandla Bhopal Ranchi Indore Jabalpur Shanxi Ahmadabad Durg-Bhilainagar Qinghai Ningxia Shandong Vadodara Raipur Jamshedpur Kolkata Veraval Surat Nagpur Cuttak Gansu Jiangsu Silvassa Bhubaneshwar Shaanxi Henan Nasik Anhui Ulhasnagar Puri Tibet Shanghai Mumbai Poona Hubei Chongqing Hyderabad Vishakhapatnam Sichuan Sholapur Vijayavada Zhejiang Jiangxi Panaji Hunan Guizhou Fujian Marmagao Guntakai Taiwan Yunnan Guangdong BangaloreChina 2011: Mangalore Chennai Guangxi Hong Kong Pondicherry MysorePopulation: 1,339,724,852 Macau Calicut (Khozikode) Salem Cuddalore TiruchirapalliUrban people: 679,000,000 Hainan Coimbatore Cochin TrivandrumUrbanisation rate: 51% Madurai Source: McKinsey Global Institute, Thomson Reuters Datastream
  6. 6. China & India Urbanization Process (2025-30)By 2025, more than 60% of world population lives in urban areas India 2025-30: Population: 1,470,000,000 Srinagar Population growth: 24% Jammu Urban people: 588,000,000 Amristar Simla Chandigam Heilongjiang Ludhiana Urbanisation rate: 40% Itanagar Dehli Kathmandu Siliguri Jilin New Dehli Inner Jaipur Agra Lucknow Ledo Sillong Mongolia Jodhpur Kanpur Liaoning Patna Kohima Xinjiang Allahabad Gwalior Imphal Dhambad Agartala Beijing Varanasi Ashansol Aizawl Tianjin Howrah Gandhinagar Hebei Kandla Bhopal Ranchi Indore Jabalpur Shanxi Ahmadabad Durg-Bhilainagar Qinghai Ningxia Shandong Vadodara Raipur Jamshedpur Veraval Kolkata Cuttak Gansu Jiangsu Silvassa Surat Nagpur Bhubaneshwar Shaanxi Henan Nasik Anhui Ulhasnagar Puri Tibet Hubei Shanghai Poona Chongqing Hyderabad Sichuan Zhejiang Mumbai Sholapur Vijayavada Vishakhapatnam Wuhan Jiangxi Panaji Hunan Guizhou Fujian Marmagao GuntakaiChina 2025: Taiwan Yunnan Guangdong Bangalore ChennaiPopulation: 1,470,787,000 Guangxi Hong Kong Mangalore Pondicherry Mysore CuddalorePopulation growth: 10% Macau Calicut (Khozikode) Salem Tiruchirapalli Shenzhen CoimbatoreUrban people: 926,000,000 Hainan Cochin Trivandrum MaduraiUrbanisation rate: 63% Source: McKinsey Global Institute, Thomson Reuters Datastream
  7. 7. Current Wheat Trade Flows % = share in global wheat trade (figures 2010/2011) 18% 3%* 13% 28% 6% 15% * Russia share 2009/2010 = 15%; Russia share 2011/2012 (e) = 15%Volatile trade patterns in agribulks} Supply is highly dependent on (regional) weather conditions} Major import demand: Africa & Far East Asia} Share in global output of China and India high (resp. 17% and 13%) Source: IGC
  8. 8. Current Coking Coal trade flows % = share in global coking coal trade 10% 5% 6% 2% 7% to 23% Asia 7% 6% 11% 3% 26% 6% 51% Mongolia!Trade is likely to become more concentrated} Australia & N. America together have 84% share in coking coal trade} Game changer: Mongolia export volume is joining the ranks!} Shift from seaborne to landborne trade Source: USGS, ABARE, AME, IEA, Metal Bulletin
  9. 9. Current Steam Coal Trade Flows % = share in global steam coal trade 13% 8% 4% 2% 2% 6% 33% 9% 15% 4% 36% 17% 8% Increased concentration reduces risk associated with greenfields} Atlantic Basin: ‘paper trade’ grown rapidly in last 4 yrs} Game changers: increasing demand from Japan after Fukushima?} India increasing coal import; relations with Indonesia & S. Africa Source: USGS, ABARE, AME, IEA
  10. 10. Production Growth in Coal Across the Globe Increase production hard coal 2009-2035 +80% 6,000 +25% 5,000 4,000 +69% 3,000 2,000 +13% 1,000Mtce 0 +57% 2009 2015 2020 2025 2030 2035 US Europe Australia +12% Russia China India Indonesia South Africa Colombia Despite rising costs, investments in mining increase } Top 30 coal miners have high reserves-to-production ratio: 60 yrs } Output of hard coal in US and Europe is in a downward trend } Centre of gravity of supply (and demand) in Far East Asia Source: IEA, Metal Bulletin
  11. 11. Current Iron Ore Trade Flows % = share in global iron ore trade 3% 2% 8% 6% 9% 35% 29% 22% 38% 4% 2%China is main importer of iron ore with a share of 59% in 2011} 95% of global iron ore trade is seaborne} Pacific trade 55% and Atlantic trade 45% (in 2001: 45%-55% resp.)} Output Pilbara region (Aus) approx. 430 mln tonnes/yr and rising Source: UNCTAD, Metal Bulletin
  12. 12. New Iron Ore Project Developments until 2014* Minor selection of total green- and brownfield projects worldwide - ArcelorMittal / Baffinland New discovered (Mary River Project) iron ore deposits in Qinghai Approx. 200 Mt reserves ~ 20 Mt 50-75 Mt - Rio Tinto - BHP Billiton - Fortescue Metals Grp - Xstrata - Eight minor companies - Atlas Mining - Rio Tinto (Guinea Simandou) - Brockman Resources 50-75 Mt - FerrAus Ltd - CITIC Pacific Mining - Rio Tinto > 400 Mt (JV Orissa Mining) - Vale - in Minas Gerais ~ 30 Mt - Kumba > 100 Mt - Xstrata - IMX 75-100 Mt } May 2012: Total project pipeline is 796 Mt of new production capacity, to come on stream between 2012-2014 ð Of which: 34% is certain, 28% is probable, 38% is possible Sources: USGS, UNCTAD, Mining Journal, various public sources
  13. 13. Country Dependency on Iron ore & Coal • Basis: share in world imports 2011 • Necessity for future development and stage in economic transition • Urbanisation rate and demographics Developed countries Newly industrialized How high is need for the commodity to a country? Developing countries Least developed countries Low High High Americas – coal Australia – iron ore• Basis: share Brazil – iron ore China – coal in world Russia – iron ore proven What is Russia – coal reserves 2011 Mongolia – coal the China – iron ore• Domestic Australia – coal India – coal availability & reserve base of a India – iron ore EU – coal self sufficiency rate country? S. Africa – coal EU – iron ore• External Brazil – coal dependency S.Korea – iron ore S.Korea –coal Japan – coal Low Indonesia – coal Japan – iron ore Source: ABN AMRO Sector & Commodity Research (based on data from BP, EIA, UNCTAD)
  14. 14. To conclude on Dry Bulk Trade Patterns 1,200 60% 1,200 100% China joined WTO & 1,000 IOC announced 1,000 80% Beijing 2008 55% 800 800 60% 600 50% 600 40% 400 400 45% 200 20% 200 Mtce Mt 0 40% 0 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1990 2000 2009 2020 2035 Atlantic Iron Ore Trade Atlantic Coal Trade forecasts by IEA Pacific Iron Ore Trade Pacific Coal Trade Pacific Iron Ore Trade Share (r.axis) Pacific Coal Trade Share (r.axis)Constantly changing trade patterns, but Asia will remain key trading area} Over the past 20 years seaborne trade patterns changed significantly} Dry bulk seaborne traded volumes increased by 400%+ in 20 years} Urbanisation & industrialisation (China, India) will provide solid base} Agribulk trade patterns will remain volatile} Centre of global coal trade will be in the pacific (share of 75% in 2020)} Huge investments will keep Australia on No.1 in iron ore output Source: IEA, Clarkson Research Services, ABN AMRO Sector & Commodity Research
  15. 15. Further Information & Disclaimer For question and further information, please contact: Casper Burgering Senior sector economist – Hard Commodities ABN AMRO Group Economics | Sector & Commodity Research tel: +31 20 383 26 93 e-mail: casper.burgering@nl.abnamro.com Visit also ABN AMRO Group Economics on the internet Disclaimer:Copyright 2012 ABN AMRO and affiliated companies (“ABN AMRO”), Gustav Mahlerlaan 10, 1082 PP Amsterdam / PO Box 283, 1000 EA Amsterdam, The Netherlands. All right reserved.This material is provided to you for information purposes only. Before investing in any product of ABN AMRO Bank NV, you should inform yourself about various consequences that you mayencounter under the laws of your country. ABN AMRO Bank NV has taken all reasonable care to ensure that the information contained in this document is correct but does not accept liabilityfor any misprints. ABN AMRO Bank NV reserves the right to make amendments to this material.This material which is subject to change without notice is provided for informational purposes and should not be construed as a solicitation or offer to buy or sell any securities or relatedfinancial instruments. While ABN AMRO makes reasonable efforts to obtain information from sources, which it believes to be reliable, ABN AMRO makes no representation or warranty of anykind, either express or implied as to the accuracy, reliability, up-to-dateness or completeness of the information contained herein. Nothing herein constitutes an investment, legal, tax or otheradvice nor is it to be relied on in any investment or decision. Certain services and products are subject to legal restrictions and therefore may not be available for residents of certain countries.You should obtain relevant and specific professional advice before making any investment decision. The past performance is not necessarily a guide to the future result of an investment. Thevalue of investments may go up or down due to various factors including but not limited to changes in rates of foreign exchange and investors may not get back the amount invested. ABNAMRO disclaims any responsibility and liability whatsoever in this respect.

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