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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, 10 November 14
Q4' 15 FOB INDONESIA COAL SWAP CLOSED LOWER THAN Q1' 15 CLOSING PRICE OF US$ 49.58 ON LAST FRIDAY
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week on week and day on day.
The Q1 swap has lost just US$ ...
Monday, 10 November 14
SGX'S API 4 FOB RICHARDS BAY COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 65.44 ON 7 NOV, LOST 4.08% M-O-M
COALspot.com: API 4 FOB Richards Bay Coal swap for Q1’ 2015 delivery has decreased US$ 2.78 (-4.08%) month over month and US$ 1.41 (-2.11%) w ...
Monday, 10 November 14
MOZAMBIQUE SIGNED CONTRACT WITH ETA STAR OF UAE FOR OPEN CAST COAL MINE IN TETE - AIM
- ETA Star to build slurry pipeline over the 600 kilometers to Beira in Mozambique to transport coal.
- The viability studies show the presence o ...
Monday, 10 November 14
YEAR 2015 CFR SOUTH CHINA COAL SWAP SHOWS A WEAK TREND THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 3.74 (-5.63%) month over month and US$ 2.19 (+3.37%) we ...
Sunday, 09 November 14
CAPE INDEX UP 3.06%; PANAMAX INDEX FELL 4.05%
COALspot.com: The BDI was almost at same levels compared to last week closing or just increased 0.77 pct from last week. The BDI was closed at 1437 ...
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- VISA Power Limited - India
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Planning Commission, India
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
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