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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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Friday, 28 November 14
NEW BIMCO CLAUSE AIMS TO REDUCE SUPPLIERS' RELIANCE ON SHIP ARREST FOR CHARTERERS' UNPAID BUNKERS
KNOWLEDGE TO ELEVATE
Ship owners can, on occasion, find themselves in the invidious position of suffering unexpected loss of hire due to a tim ...
Friday, 28 November 14
JSW ENERGY AND GRM RESOURCES JOIN GLOBALCOAL
COALspot.com: globalCOAL® announced yesterday that two new Market Members have joined its online coal trading platform. According globaCOAL&rsq ...
Thursday, 27 November 14
MINING SERVICES TAX SPIKED BY 233% - BISNIS INDONESIA
COALspot.com: The Energy and Mineral Resources Department of Indonesia said the tax contribution from mining services sector in the 3rd Q 2014 ...
Thursday, 27 November 14
PANAMAX : EXPECTATION'S FOR A STRONG END OF YEAR RUSH, DISAPPEAR DAY BY DAY - FEARNLEYS
Handy
“We have experienced a firming market the last couple of weeks. More activity from cargo owners in the Atlantic and less available to ...
Wednesday, 26 November 14
OVERSUPPLY OF TONNAGE PUSHED PANAMAX SEGMENT DOWN FOR ANOTHER WEEK
COALspot.com: The Dry Bulk market managed to reverse its course from the week prior and with the sole exception of the Panamax segment, we witnesse ...
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- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
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