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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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Wednesday, 17 December 14
MARKET INSIGHT - INTERMODAL SHANGHAI, SNP TEAM
As the end of the fourth quarter is approaching, we are all witness to the second hand market prices softening day by day. Any new deal surfacing t ...
Tuesday, 16 December 14
FOB RICHARDS BAY COAL SWAP FOR Q2' 15 DELIVERY CLOSED AT US$ 65.60 PMT
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month.
The Q1 swap has lost US$ 0.18 (-0.27%) month on month ...
Tuesday, 16 December 14
SUB-BIT FOB INDONESIA COAL SWAP CONTINUES ITS FALL
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 1.7 ...
Monday, 15 December 14
WILL TANKERS BENEFIT FROM REEMERGENCE OF FLOATING STORAGE PLAYS? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market has been seeing high freight rates for some time now, riding on the back of low oil prices, which are boosting demand from develo ...
Monday, 15 December 14
INDONESIAN COAL PRICE REFERENCE CRASHES THROUGH $65
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in December. HBA for t ...
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- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Posco Energy - South Korea
- PTC India Limited - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Planning Commission, India
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
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