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Tuesday, 16 December 14
THIS PRICE IS A STEAL - EVA TZIMA
 COALspot.com: Despite concerns that the slowdown of the Chinese economy would affect imports of iron ore, it seems that this has not been the case so far. The Chinese have been importing record volumes of iron ore throughout the year, taking advantage of softening prices, which touched their lowest level in five years a few days ago. Firm supply from Brazil and Australia has also supported this trend. Both producers, with a combined global market share of over 70%, have been steadily increasing their production post 2000, mainly guided by the mandate of accelerating Chinese appetite.
The boom of economic development in China has in turn made the country “the gift that keeps on giving” for mineral exporters across the globe. Big iron ore producers have been speeding up their sup-ply post 2000, mainly relying on what seemed as a race by China to match its infrastructure with its growth, but somewhere along the lines the fact that the gradual westernization of China, would at some point translate into deceleration of steel consumption was probably overlooked by the market, which brings us to today.
The growth of steel consumption in the country turned red for the first time in over two decades. The slowdown in property construction has quickly curbed the domestic need for steel and consequent-ly iron ore to a significant degree, which translated to excess production of steel as well as increasing iron ore stockpiles. In turn prices for both commodities started sliding, kick starting a vicious cycle of downward pressure.
From one hand, iron ore production was not tamed by the big ex-porters in order to support prices. As big miners in both Australia and Brazil have designed their production capacity around an economy of scale model, cutting down their production to match softening demand growth has not been an option to them, while this also gave them the means to start squeezing the bottom line of their Chinese competitors. At the same time, the Chinese themselves remained buyers of iron ore, enticed by the new attractive price levels they have long desired, with local steel producers remaining active de-spite the fact that domestic demand had started to scale back significantly. That led to surging exports, with cheap Chinese steel flooding the markets, further weighing on global prices.
In both iron ore and steel markets the prospects remain dim, with no evidence suggesting that a reversal is imminent. November was the second lowest month of the year in terms of Chinese iron ore imports, while the country’s exports of steel surged to a record high. Exhausting the stallion of the developing economies in the “becoming a developed country” race, means that in the not so distant future, China could see its growing appetite for growth linked commodities squeezed further. It is often said lately that India or other developing economies could step up to fill in the demand gap created by China, but let’s not forget that history doesn’t always repeat itself.
The truth is that the world in which China emerged as the big economy it currently is, is a very different place today. Developing economies nowadays cannot rely on developed ones to accelerate their growth in the same degree they used to, as most of the latter still struggle themselves with ailing growth, while at the same time and even most importantly, the belief that free trade is always affected during periods of economic crisis is becoming more evident these days. India has persistently tried to promote the “Make in India” and although the policy has met little success so far, Prime Minister Modi has made the idea of stop relying on imports for some of the most important commodities and start using domestic reserves, his personal goal.
My opinion is that more countries will try to protect their domestic production amidst evidence that the path out of the economic crisis now appears longer than what we originally thought it would be. In doing so, they will have to allow for ample room for protectionism measures to be applied, setting limits on quantity and/or price of imports, in order to support domestic production instead, which is exactly the opposite of what the extrovert in nature shipping industry needs.
Eva Tzima
Research Analyst
Compiled by:
Intermodal Research & Valuations
About the Author
Eva Tzima has experience of more than a decade as a financial analyst and has focused on the shipping industry through private equity projects as well as maritime stock analysis. Since 2012 she has been working as a Research analyst at Intermodal Shipbrokers Co., where she currently holds the position of Head of Research, focusing in the specific analysis of the SnP, Newbuilding and Demolition markets across the Dry Bulk, Tanker, Container and Gas Carrier sectors.
Previous to her current post she worked as an investment manager for a privately owned portfolio and in Trafalgar Asset Managers Ltd in London, mainly focusing in Private Equity Projects in the shipping, energy and aircraft sectors, as well as in Primary and Secondary Debt investments. During her employment in Trafalgar she acted as a director across a number of boards of entities affiliated to Trafalgar.
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 re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Wednesday, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fu ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mi ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
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- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
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