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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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Thursday, 04 September 14
PUNJAB STATE POWER CORPORATION LIMITED OF INDIA HAS DECIDED TO BUY IMPORTED COAL - HINDUSTAN TIMES
COALspot.com: The Punjab State Power Corporation Limited (PSPCL) has decided to buy imported coal to run its thermal plants, as reported by Hindust ...
Thursday, 04 September 14
INDONESIAN COAL MINERS MAY GET MORE TIME ON ROYALTIES - FITCH RATINGS
COALspot.com: Fitch Ratings says that coal miners in Indonesia are likely to get more time to repay the government the royalties that were set off ...
Thursday, 04 September 14
INDONESIAN COAL SWAPS SLIDE THIS PAST WEEK
COALspot.com: Indonesian coal swaps for average October 2014 decreased US$ 0.90 (-1.68%) day on day and US$ 1.80 (-3.31%) per mt week on week. The ...
Thursday, 04 September 14
CAPESIZE : SENTIMENT REMAINS POSITIVE FOR Q3/Q4 - FEARNRESEARCH
Handy
The Atlantic market has experienced more activity this week. Rates for TA´s are up about 8% w-o-w, much lead by an increasing number ...
Wednesday, 03 September 14
KOREA MIDLAND POWER CO. LTD INVITES BIDS FOR 1 MMT OF BITUMINOUS & SUB-BITUMINOUS COAL FOR BORYEONG POWER PLANT
COALspot.com: KOMIPO again in the market for 1 million tons of 5700 NAR and 4600 NAR coal for Jan – March 2015. South Korean state-owned util ...
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Showing 3506 to 3510 news of total 6871 |
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- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- White Energy Company Limited
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
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