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Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
 COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & Mining Consultant for Wood Mackenzie says there is little to suggest the picture is likely to pick up in 2015 with demand set to remain "slower not lower" and therefore prices will remain low for longer.
Addressing delegates at the Mining Indaba conference in Cape Town, Mr Emslie asserts; "It’s hard to believe, but 2015 has started even worse than 2014 finished. Having commenced January just above US$70 a tonne , the TSI 62% Index was trading at US$62/t by the close of the month resulting in a monthly average of US$67/t CFR – its lowest since May 2009."
According to Wood Mackenzie's iron ore market outlook, demand is unlikely to show any meaningful improvement until late Q1 or early Q2 due to a combination of seasonal and cyclical reasons. Mr Emslie adds: "We have lowered our Q1-15 price forecast to US$67/t CFR and our CY-15 price to US$70/t CFR (basis 62% Fe sinter fines)."
Explaining Wood Mackenzie's short-term outlook in more detail Mr Emslie says: "Iron ore prices may be languishing at their lowest level for nearly six years, but it remains difficult to make a positive case for prices in the short term. Chinese steel mills have cut production in recent weeks due to a combination of weak demand and planned maintenance and this is feeding through directly to iron ore requirements. With the Lunar New Year holidays just a few weeks away Chinese steel production will get worse before it gets better. Steel mills will not re-stock in a falling or stagnant market and when they do there should be plenty of slack in the system, as shown by the high level of inventory held at Chinese mines.
Outside of China the picture is similarly uninspiring due to a combination of seasonal and structural factors. Other than the Middle East and India none of the major iron ore importers have shown any meaningful improvement in demand, a situation that is unlikely to change in the short term."
"The outlook for Q2 is marginally better: Chinese mills should start re-stocking post Lunar New Year, driven by seasonally stronger domestic demand and a pick-up in exports of steel products. This should coincide with slightly tighter seaborne supply as Australian exports reach a temporary plateau and high cost suppliers elsewhere remain out of the market."
Wood Mackenzie warns that if the iron ore price remains in the low $60/t range then more closures from mid-tier producers seem likely and more asset write-downs are a near certainty: "As recent announcements show, there’s only so far that cost cutting can go before difficult decisions need to be taken concerning the long term viability of a mine in a structurally oversupplied market," Mr Emslie adds.
So what led to the collapse in prices? "Australian exports surged ahead by approximately 140 million tonnes (Mt) in 2014 based on investment decisions made several years ago when prices were higher and the long term view was more bullish," says Mr Emslie, "As supply ramped up in 2014, Chinese steel demand did the unthinkable and contracted for the year creating a clear disconnect between supply and demand, marking a decisive turning point for iron ore."
On Chinese imports, which crucially account for 66% of the global total, Mr Emslie says: "2014 finished on a high for Chinese imports (in volume terms not value) with China importing a record 86.9Mt in December." The total value of Chinese imports (in US dollar terms) fell in 2014, despite the volume rising by over 100Mt. Mr Emslie explains; "China’s import bill for iron ore peaked at $112 billion in 2011 (when iron ore prices averaged $168/t) but have subsequently fallen by 16% to $95 billion in 2014. China should see another significant drop in its iron ore import bill in 2015 as significantly lower prices and freight costs more than offset higher volume. We currently forecast a 30Mt rise in Chinese imports of iron ore this year with strong growth in Australian shipments partially offset by price related cutbacks elsewhere."
Pointing to more recent to iron ore news from Australia in January Mr Emslie comments on the impact of sustained oversupply; "The series of announcements and data we've seen provides further evidence of the widening gap between the major miners and the rest of the supply chain. Fourth quarter production reports from Rio Tinto, BHP Billiton and FMG confirm that their low cost expansions are progressing well, paving the way for even higher output in 2015/16." Mr Emslie concludes; "The strong performance of the majors comes at the expense of relatively high cost mid-tier suppliers who are scaling back investment and cutting production in response to low prices and compressed margins."
Iron ore in numbers:
- Iron ore price forecast for Q1 2015 is $67/t CFR.For CY 2015 $70/t CFR (basis 62% Fe sinter fines)
- Global iron ore production 2201 million tonnes (2014)
- Global imports 1404 million tonnes (2014)
- Chinese imports 930 million tonnes (2014)
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
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Tuesday, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- London Commodity Brokers - England
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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