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Tuesday, 16 December 14
THIS PRICE IS A STEAL - EVA TZIMA
 COALspot.com: Despite concerns that the slowdown of the Chinese economy would affect imports of iron ore, it seems that this has not been the case so far. The Chinese have been importing record volumes of iron ore throughout the year, taking advantage of softening prices, which touched their lowest level in five years a few days ago. Firm supply from Brazil and Australia has also supported this trend. Both producers, with a combined global market share of over 70%, have been steadily increasing their production post 2000, mainly guided by the mandate of accelerating Chinese appetite.
The boom of economic development in China has in turn made the country “the gift that keeps on giving” for mineral exporters across the globe. Big iron ore producers have been speeding up their sup-ply post 2000, mainly relying on what seemed as a race by China to match its infrastructure with its growth, but somewhere along the lines the fact that the gradual westernization of China, would at some point translate into deceleration of steel consumption was probably overlooked by the market, which brings us to today.
The growth of steel consumption in the country turned red for the first time in over two decades. The slowdown in property construction has quickly curbed the domestic need for steel and consequent-ly iron ore to a significant degree, which translated to excess production of steel as well as increasing iron ore stockpiles. In turn prices for both commodities started sliding, kick starting a vicious cycle of downward pressure.
From one hand, iron ore production was not tamed by the big ex-porters in order to support prices. As big miners in both Australia and Brazil have designed their production capacity around an economy of scale model, cutting down their production to match softening demand growth has not been an option to them, while this also gave them the means to start squeezing the bottom line of their Chinese competitors. At the same time, the Chinese themselves remained buyers of iron ore, enticed by the new attractive price levels they have long desired, with local steel producers remaining active de-spite the fact that domestic demand had started to scale back significantly. That led to surging exports, with cheap Chinese steel flooding the markets, further weighing on global prices.
In both iron ore and steel markets the prospects remain dim, with no evidence suggesting that a reversal is imminent. November was the second lowest month of the year in terms of Chinese iron ore imports, while the country’s exports of steel surged to a record high. Exhausting the stallion of the developing economies in the “becoming a developed country” race, means that in the not so distant future, China could see its growing appetite for growth linked commodities squeezed further. It is often said lately that India or other developing economies could step up to fill in the demand gap created by China, but let’s not forget that history doesn’t always repeat itself.
The truth is that the world in which China emerged as the big economy it currently is, is a very different place today. Developing economies nowadays cannot rely on developed ones to accelerate their growth in the same degree they used to, as most of the latter still struggle themselves with ailing growth, while at the same time and even most importantly, the belief that free trade is always affected during periods of economic crisis is becoming more evident these days. India has persistently tried to promote the “Make in India” and although the policy has met little success so far, Prime Minister Modi has made the idea of stop relying on imports for some of the most important commodities and start using domestic reserves, his personal goal.
My opinion is that more countries will try to protect their domestic production amidst evidence that the path out of the economic crisis now appears longer than what we originally thought it would be. In doing so, they will have to allow for ample room for protectionism measures to be applied, setting limits on quantity and/or price of imports, in order to support domestic production instead, which is exactly the opposite of what the extrovert in nature shipping industry needs.
Eva Tzima
Research Analyst
Compiled by:
Intermodal Research & Valuations
About the Author
Eva Tzima has experience of more than a decade as a financial analyst and has focused on the shipping industry through private equity projects as well as maritime stock analysis. Since 2012 she has been working as a Research analyst at Intermodal Shipbrokers Co., where she currently holds the position of Head of Research, focusing in the specific analysis of the SnP, Newbuilding and Demolition markets across the Dry Bulk, Tanker, Container and Gas Carrier sectors.
Previous to her current post she worked as an investment manager for a privately owned portfolio and in Trafalgar Asset Managers Ltd in London, mainly focusing in Private Equity Projects in the shipping, energy and aircraft sectors, as well as in Primary and Secondary Debt investments. During her employment in Trafalgar she acted as a director across a number of boards of entities affiliated to Trafalgar.
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Tuesday, 23 December 14
Q4'15 FOB RICHARDS BAY COAL SWAPS FALL $ 3.85 IN A MONTH
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month.
The Q1 swap has lost US$ 2.13 (-3.17%) month on month ...
Tuesday, 23 December 14
SHIPOWNERS ARE FINALIZING MORE DEALS AS YEAR END COMES CLOSER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
With the 2014 year just a few days before waving goodbye, shipowners are looking to close their pending deals in both the newbuilding and S&P m ...
Monday, 22 December 14
Q2'15 CFR SOUTH CHINA COAL SWAP CLOSED $ 0.30 LOWER THAN Q1'15 CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.67 (-5.81%) month over month and US$ 0.35 (-0.58%) ...
Monday, 22 December 14
API 5 FOB NEWCASTLE COAL SWAPS ARE HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.71 per MT (-3.24%) and closed at US$ 51.02 on 19 December month ...
Sunday, 21 December 14
PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA FALLS FURTHER
COALspot.com: The BDI continued its fall as cape index lost heavily week on week.
The BDI was down 6.95 percent week over week and closed at 8 ...
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- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- MS Steel International - UAE
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Planning Commission, India
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