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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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Tuesday, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
Tuesday, 03 March 15
Q4' FOB INDONESIA COAL SWAP CLOSED 2% LOWER COMPARED TO Q2 CLOSING PRICE OF $ 47.47
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose month on month and declined week over week.
The Q2 swap increased US$ 2.24 ...
Tuesday, 03 March 15
FOB RICHARDS BAY COAL SWAPS: Q2 UP 9.60%; Q3 UP 9.75% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and week on week.
The Q2 swap has soared US$ 5 ...
Monday, 02 March 15
CFR SOUTH CHINA COAL SWAP FOR Q2 DELIVERY REACHED $ 57.50 PMT W/E 27 FEB 2015
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.37 (+2.44%) per MT month over month and declined US$ 0.42 ...
Monday, 02 March 15
BORYEONG POWER PLANT OF KOMIPO TO IMPORT 140K OF SUB-BITUMINOUS COAL FOR Q2
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 140,000 (70 ...
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- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Planning Commission, India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- The University of Queensland
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- White Energy Company Limited
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
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