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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, 04 November 14
FOB NEWCASTLE COAL SWAPS GAINED WEEK OVER WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2014 delivery decreased US$ 1.09 (-1.99%) month over month and increased US$ 0.31 (+0.58% ...
Monday, 03 November 14
ADARO PRODUCED 41.90MT OF COAL FOR FIRST 9 MONTHS OF 2014
COALspot.com: Adaro’s coal production in the third quarter reached 14.03 Mt, a 2% increase compared to the same period of last year. Accordin ...
Monday, 03 November 14
CFR SOUTH CHINA COAL SWAP FOR Q4' 2014 DELIVERY LOST 2.80% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery has decreased US$ 1.86 (-2.80%) month over month and increased US$ 0.37 ( ...
Monday, 03 November 14
INDONESIAN'S COAL EXPORTS JUMP IN SEPTEMBER
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
Sunday, 02 November 14
CAPE INDEX WAS UP 46.65% WEEK ON WEEK
COALspot.com: The BDI and Cape index continued the strong upward trend this week. The BDI was up 19.80 pct and Cape index was up by 46.65 per ...
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- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
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