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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 $70/t CFR (basis 62% Fe sinter fines)
- Global iron ore production 2201 million tonnes (2014)
- Global imports 1404 million tonnes (2014)
- Chinese imports 930 million tonnes (2014)
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Tuesday, 10 February 15
SUB-BIT FOB INDONESIA COAL SWAP ADVANCES 3.79% WEEK ON WEEK
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 0.85 (+1.81%) month o ...
Tuesday, 10 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK OVER WEEK, RAISING HOPES?
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 0.95 per MT (+1.91%) week over week and declined US$ 0.06 (-0.12%) ...
Monday, 09 February 15
AUSTRALIAN COAL PRODUCERS BEST POSITIONED IN OVERSUPPLIED MARKET; US MINES MOST AT RISK - WOOD MACKENZIE
In a 2015 global coal outlook report, Wood Mackenzie says that Australia and Indonesian coal suppliers will see some upside in the difficult months ...
Monday, 09 February 15
FOB RICHARDS BAY COAL SWAP GAINS 3.65% TO ONE-MONTH HIGH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and day on day.
The Q2 swap has soared US$ 2.1 ...
Monday, 09 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
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- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
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