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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, 28 January 15
CAPES CONTINUED THEIR UPWARD MOVEMENT LAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market displayed a mirror performance of that of the week prior, with the Capesize market correcting further upwards and ...
Tuesday, 27 January 15
Q1 FOB INDONESIA COAL SWAP CLOSED AT $ 47.87 FOR WEEK ENDING JAN. 23
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 gain week over week and declined month on month.
The Q1 swap has decline US$ 0.9 ...
Tuesday, 27 January 15
Q2 FOB NEWCASTLE COAL SWAP UP 4.5% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 0.28 per MT (-0.54%) month over month and increased US$ 1.23 ( ...
Monday, 26 January 15
OVERSUPPLY, AMPLE STOCKPILES, AND LACKLUSTER UNDERLYING STEEL DEMAND KEPT COKING COAL PRICES LOW IN 2014
COALspot.com: Coking coal prices (FOB & CFR) fell 15% and 18% respectively during the year, amidst persistent oversupply, ample inventory and s ...
Monday, 26 January 15
FOB RICHARDS BAY Q2 COAL SWAP CLOSED LOWER THAN Q1 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has fell ...
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- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Australian Coal Association
- The University of Queensland
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
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