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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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- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Planning Commission, India
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
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