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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, 11 March 15
RICHARDS BAY COAL SWAPS DROP $ 3.65 - 4.0/T W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has fell US$ ...
Wednesday, 11 March 15
DRY BULK MARKET CLOSED OFF ON THE GREEN FOR A SECOND WEEK IN A ROW - INTERMODAL
COALspot.com: The Dry Bulk market closed off on the green for a second week in a row, while the performance of Capesizes hindered a more substantia ...
Wednesday, 11 March 15
MARKET INSIGHT : NEWBUILDINGS - PANOS TSILINGIRIS
From a cost-based, buy-low perspective, there is currently a buying opportunity in the second-hand dry bulk market. I am an anti-cyclical (buy-low) ...
Wednesday, 11 March 15
DRY BULK MARKET: ALL IS NOT LOST FOR A RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The low cost of commodities across the board could trigger an increase of trade among many countries, which in turn could lead to a recovery of the ...
Wednesday, 11 March 15
U.S. ELECTRIC GENERATING COMPANIES TO ADD MORE THAN 20 GW OF GENERATING CAPACITY IN 2015; 16 GW OF GENERATING CAPACITY IS EXPECTED TO RETIRE IN 2015
COALspot.com: In 2015, electric generating companies in U.S. expect to add more than 20 gigawatts (GW) of utility-scale generating capacity to the ...
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Showing 3146 to 3150 news of total 6871 |
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- CNBM International Corporation - China
- Central Java Power - Indonesia
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Australian Coal Association
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
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