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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, 29 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average November 2014 flat day on day and lost US$ 0.85 (-1.66%) per mt week on week. The swap also lost US ...
Monday, 29 September 14
CFR SOUTH CHINA COAL LOST AROUND 5% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 3.55 (-5.10%) month over month and flat week over week.
...
Sunday, 28 September 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market shows a bit weak trend this week.
The BDI was lost 2.42% week on week and closed at 1049 points on 26 Se ...
Sunday, 28 September 14
BERAU AGREES DEAL WITH GOVT, MINING AREA REDUCED - THE JAKARTA POST
Coal miner PT Berau Coal, a subsidiary of Jakarta-listed PT Berau Coal Energy (BRAU), has signed a memorandum of understanding (MoU) with the gover ...
Saturday, 27 September 14
OIL MARKET CONTANGO: SPECULATION ON FUTURE PRICES CAN BE A RISKY MOVE, EVEN FOR TANKER OWNERS HELLENIC SHIPPING NEWS
Despite the fact that tanker owners can easily use their vessels as floating storage units for oil, in a bid to exploit the current oil market dyna ...
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- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Australian Coal Association
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
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