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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, 03 December 14
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
The dry bulk market seems unable to turn sentiment round and is still looking for direction. The BCI's 887-point free fall last week had an obv ...
Wednesday, 03 December 14
CAPESIZE DRY BULK CARRIERS ENTER 2015 WITH MIXED FORTUNES, WITH A POSITIVE AND A NEGATIVE SCENARIO BOTH EMERGING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The future of the Capesize dry bulk market appears to be engulfed from mixed “feelings” among analysts and market participants, despite ...
Tuesday, 02 December 14
KEY PLAYERS SHED NEW PERSPECTIVES ON COAL MARKETS
Press Release: Singapore’s ONLY and longest established Coal Trade event. Whilst Coal prices remain challenging, there is widespread consensu ...
Tuesday, 02 December 14
KOMIPO INVITES BIDS FOR 585,000 METRIC TONS OF COAL FOR Q1'15
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids for the supply of 585,000 Metric Tons of coal. According to invitation, 5700 ...
Tuesday, 02 December 14
U.S WEEKLY COAL PRODUCTION FELL 1.4% WEEK ON WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.6 million short tons (mmst) o ...
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- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- PTC India Limited - India
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- The University of Queensland
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Parliament of New Zealand
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
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