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Sunday, 08 November 15
CAPESIZE FREIGHT RATES IN AUSTRALIA-CHINA ROUTES OVER 50% CHEAPER THAN BRAZIL-CHINA ROUTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 China’s mining and steel industries are facing tectonic shifts over the past couple of years, with the country’s limiting of coal use, falling steel demand both domestic and foreign and iron ore prices tumbling to near 7-year lows as of yesterday and well below $50/ton. As such, the persistence of mining giants to keep production levels up, is puzzling.
In its latest report, shipbroker Cotzias Intermodal Shipping attempted to decode this puzzle, which is very important to the future prospects of the dry bulk shipping industry. According to the report, “four companies dominate global iron ore production, namely; BHP Billiton, Vale, Rio Tinto, and Fortescue Metals Group. Together these companies control more than 70 percent of the seaborne iron ore market”. However, despite low iron ore prices, the two major producers in Brazil and Australia have been following through with their longstanding plans to increase production.
According to Cotzias Intermodal Shipping’s Christopher Thomas Whitty, Marketing Manager, Towage & Port Agency, “the low iron ore price also comes as China’s official forecaster warned of a 20% fall in Chinese steel consumption over the next 15 years, as Beijing accelerates the shutdown of outdated and loss-making factories. Rio Tinto in Australia and Vale in Brazil, are still ramping up production. For the first nine-months of 2015, Vale’s production overall is around 8 million metric tons higher than Rio Tinto’s at 248 million metric tons, while Vale’s shipments are just over 3 million metric tons higher. Of course Australian miners still have an advantage in delivered costs to China, the main importer for iron ore. For example, Capesizes hauling the commodity from Brazil to China last week saw rates around $12/ton for the Tubarao/Qingdao route, while from Rio Tinto’s Dampier terminal in Western Australian, freight rates were slightly in excess of $5.10/ton”.
Mr. Whitty added that “it is quite interesting to see that current iron ore prices aren’t worrying Rio Tinto. Their CEO, Andrew Harding, said he’s not losing sleep, because the business line, like the miner itself, is in for the long haul. He reasons that populations will continue to grow and develop, especially in Asia and iron ore will be needed to serve their needs. In September, Rio Tinto said its modelling showed that the world would need three billion tons of iron ore by 2030”.
Meanwhile, as per Intermodal’s analyst, “on the other side of the world, Vale is also quite confident in their iron ore division after releasing their third quarter results for 2015. Their highlight is the significant cost cutting during this period, which made Vale, the company with the lowest production cost/ton in the entire sector, reach an unprecedented cost level of $ 12.7/ton of iron ore. They are trailing faster growth compared to Australian majors, who this year posted stronger increases to volumes from new capacity ramp-ups”.
He added that “this is an oversupplied market that is obviously affected by the shrinking Chinese steel demand. On the other hand, oversupplied ore trade also creates opportunities for the large players, since it means that certain high-cost producers will struggle to survive. Some iron ore mines, such as those in Canada, China and Africa, have already buckled under the pressure. Nevertheless, producers with operating costs that are far below current iron ore prices are very well-positioned to take market share in the long term. Now if several high-cost producers exit the industry, it would be quite difficult for them to re-commence operations.
Over the long term, the low-cost iron mines could potentially fill the gap that remains after smaller companies exit the market. The gain in market share will likely increase margins, operating cash flow and profits. Hopefully this could also change the dynamics in the market and positively affect the demand for seaborne trade”, Whitty concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 12 October 15
BDI WEIGHED DOWN BY CAPE
COALspot.com: The BDI (Baltic Dry Index) has come back down again this week. The BDI is a benchmark index used to assess the overall cost of moving ...
Sunday, 11 October 15
TANKER SHIPPING: MORE OPTIMISM IN SIGHT FOR TANKERS IN THE WINTER SEASON - BIMCO
Demand:
2015 has been the year of the tanker. The fundamental improvements with slow supply-side growth for some years coupled with low oil pri ...
Friday, 09 October 15
US WEEKLY COAL OUTPUT UP 1.2 PERCENT TO 17.7 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 08 October 15
CAPESIZE: MOST PEOPLE AGREE A SPIKE IN RATES WILL HAPPEN; WHEN, HOW LONG AND HOW SUBSTANTIAL? - FEARNLEYS
Cape
Depressives start of the fourth quarter, with c3 approaching USD 12 pmt and c5 presently in the mind 5's. According to Fearnleys ship br ...
Wednesday, 07 October 15
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS DOWN 21 PER CENT COMPARED WITH THE SAME PERIOD IN 2014 - EIA
Coal Supply
Lower U.S.’s domestic coal consumption and reduced exports contribute to a forecast decline of 89 million short tons (M ...
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- Maheswari Brothers Coal Limited - India
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- Romanian Commodities Exchange
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- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
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- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
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- Pipit Mutiara Jaya. PT, Indonesia
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- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
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- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
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- Alfred C Toepfer International GmbH - Germany
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- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
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- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
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- Tamil Nadu electricity Board
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- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
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- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Videocon Industries ltd - India
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