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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, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- White Energy Company Limited
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- The Treasury - Australian Government
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