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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warned of a 20% fall in Chinese steel consumption over the next 15 years, as Beijing accelerates the shutdown of outdated and loss-making factories.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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Wednesday, 07 October 15
SHIPPING MARKET INSIGHT - INTERMODAL
Sale and Purchase activity during the first three quarters of 2015 and more specifically during the summer season has been rather remarkable. 421 v ...
Wednesday, 07 October 15
INDONESIA COAL SWAPS HAVE CONTINUED TO DECLINE, FALLING ALMOST 7% M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.23 (-5.51%) per t ...
Tuesday, 06 October 15
THE IMPACT OF LOW OIL PRICE ON THE SHIPPING INDUSTRY - LITERATED
The fall in global oil prices over the last one year has been beneficial to the shipping industry. The demand for oil tankers has picked up and the ...
Tuesday, 06 October 15
FOB RICHARDS BAY COAL SWAPS PLUNGE MORE THAN 6 PER CENT M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 declined week over week and month over month.
The Q4 swap was down US$ ...
Monday, 05 October 15
Q1 & Q2 2016 DELIVERY SWAPS DECLINED M-M AND W-W THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $0.36 per ton (0.85%) month over month to US$ 42.12 per ton. The ...
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- Interocean Group of Companies - India
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- Sojitz Corporation - Japan
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
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- Straits Asia Resources Limited - Singapore
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- IHS Mccloskey Coal Group - USA
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- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
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- Mintek Dendrill Indonesia
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- Goldman Sachs - Singapore
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- Planning Commission, India
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- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
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- Electricity Generating Authority of Thailand
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- Petron Corporation, Philippines
- Minerals Council of Australia
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- Siam City Cement - Thailand
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- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
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- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
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- Global Green Power PLC Corporation, Philippines
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- Ceylon Electricity Board - Sri Lanka
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- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
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- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
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- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
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- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
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