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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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Saturday, 03 January 15
U.S WEEKLY COAL PRODUCTION FELL 11.2% TO 17.6 MMST WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 01 January 15
FOB RICHARDS BAY COAL SWAPS CLOSED AT $63.47 PMT ON 26 DEC, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.37 (-4. ...
Wednesday, 31 December 14
COASTAL ENERGEN (C&O) COMMENCES 1ST UNIT OF 1200 MW POWER PLANT IN INDIA
COALspot.com: Coastal Energen, part of the Coal & Oil Group, announced last week the commissioning and commencement of power production at the ...
Wednesday, 31 December 14
SUB-BIT INDONESIA COAL Q2' 15 DELIVERY SWAP CLOSED 1.03% LOWER COMPARED TO AVERAGE Q1' 15 DELIVERY PRICE - SGX
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and gained week over week.
The Q1 swap has lost US$ 1.35 (-2 ...
Tuesday, 30 December 14
SHIP PRICES KEEP ON FALLING, SALES COME EARLY FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship prices keep on falling on the back of low freight rates. According to the latest report from shipbroker Allied Shipbroking, January sales seem ...
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- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Economic Council, Georgia
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
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