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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, 17 November 14
INDONESIAN COAL PRICE REFERENCE CONTINUES FREE FALL; SLUMPS TO 69-MONTH LOW
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in November. HBA for t ...
Monday, 17 November 14
API 5 FOB NEWCASTLE COAL SWAP FOR Q1' 15 DELIVERY CLOSED AT $ 52.75
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery has decreased US$ 1.77 (-3.25%) month over month and US$ 0.02 (-0.04%) day ...
Monday, 17 November 14
SOUTH CHINA COAL SWAP SLIGHTLY INCREASED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 1.73 (-2.67%) month over month and US$ 0.10 (-0.16%) da ...
Sunday, 16 November 14
THE BDI LOST 12.59% WEEK ON WEEK; THE BCI LOST 19.95%
COALspot.com: The BDI fell 12.59 percent to 1256 point week on week on Friday 14 November. All the segments were also most down this week. The cape ...
Friday, 14 November 14
U.S. WEEKLY COAL OUTPUT SLIPS SLIGHTLY WEEK ENDING NOVEMBER 08
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
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- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- VISA Power Limited - India
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Planning Commission, India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
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