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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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Monday, 08 December 14
GOVERMENT TO WITHDRAW CNC STATUS OVER SUSPECTED FLAWS - THE JAKARTA POST
The Energy and Mineral Resources Ministry’s directorate general for mineral and coal plans to review the clean and clear (CnC) status held by ...
Monday, 08 December 14
FOB NEWCASTLE COAL SWAPS SLIP W-O-W AND M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.10 on 5 December after losing US$ 0.55 (-1.04%) month over ...
Sunday, 07 December 14
SUPRAMAX S8 ROUTE SLIGHTLY INCREASED WEEK ON WEEK
COALspot.com: The BDI continued its fall as cape index fell heavily week on week.
The BDI lost around14.83 pct within last five working day an ...
Saturday, 06 December 14
TANKER FLOATING STORAGE PLAYS COULD COME INTO PLAY IF VLCC RATES STAY AT CURRENT LEVEL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Contango: A phenomenon in commodities futures price curves where the delivery price of a futures contract is greater than the current price. With t ...
Saturday, 06 December 14
MUNDRA PORT MAKES HISTORY BY HANDLING THE LARGEST BULK CARRIER TO CALL ON WEST COAST OF INDIA
COALspot.com: Adani Ports & SEZ Ltd, India’s largest port developer and part of Adani Group, yesterday said its Mundra Port successf ...
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- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Australian Coal Association
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- The University of Queensland
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
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