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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, 07 January 15
FUEL EFFICIENT SHIPS MAKE LESS SENSE IN LOWER BUNKER PRICE MARKET, BUT FUEL COSTS ARE BOUND TO RISE AGAIN
The shipping industry entered 2015 on mixed emotions, as a relatively buoyant tanker market is met by a rather lackluster dry bulk market. Still, a ...
Wednesday, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
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Showing 3271 to 3275 news of total 6871 |
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- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Dalmia Cement Bharat India
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Australian Coal Association
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- The University of Queensland
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
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