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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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Tuesday, 18 November 14
VALEMAX DEAL TO DETERMINE DRY BULK MARKET'S FATE - DREWRY MARITIME RESEARCH
Vale’s accord to sell and lease four Valemax vessels to COSCO might have negative repercussions on dry bulk freight rates. Vale has committed ...
Tuesday, 18 November 14
SUB-BIT FOB INDONESIA COAL SWAP DELIVERY Q2' 2015 CLOSED AT $ 49.55; DOWN 4.10% M-O-M
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, gained week on week and day on day.
The Q1 swap has lost US ...
Tuesday, 18 November 14
FOB RICHARDS BAY COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT $ 66.31; UP 1.33% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for Q1’ 2015 delivery has gained US$ 0.27 (+0.41%) month over month and US$ 0.87 (+1.33%) week ...
Tuesday, 18 November 14
CHEAP OIL PRICES COULD RESHAPE GLOBAL OIL EXPORTING MAP - HELLENIC SHIPPING
Tanker owners have enjoyed a rather healthy 2014, but as the year draws to a close, the fall of oil prices is bound to reshape traditional, as well ...
Monday, 17 November 14
SKULD ISSUES URGENT NOTICE ON BANKRUPTCY OF OW BUNKER A/S
Further to the Association’s advices of 7 November 2014, more information has come to light with respect to the potential impact and scale of ...
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Showing 3366 to 3370 news of total 6871 |
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- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- PTC India Limited - India
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- White Energy Company Limited
- Borneo Indobara - Indonesia
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
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