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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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Monday, 24 November 14
CHOPPY WATERS IN DRY BULK - SGX
COALspot.com: Dry bulk freight rates have experienced a sharp rise in volatility in recent weeks as bulk commodity supply has ramped up, said SGX i ...
Monday, 24 November 14
Q1 2015 FOB NEWCASTLE COAL SWAP CLOSED AT $ 52.73
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.73 on 21 November after losing US$ 0.40 (-0.75%) month ove ...
Monday, 24 November 14
CFR SOUTH CHINA COAL: Q2' 15 COAL SWAPS CLOSED LOWER COMPARED TO Q1' 15 SWAPS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 0.63 (-0.99%) month over month and US$ 0.12 (-0.19%) da ...
Sunday, 23 November 14
SPOT FREIGHT RATES IMPROVED SLIGHTLY OVER PREVIOUS WEEK
COALspot.com: The BDI was up 5.41 pct week on week and closed at 1,324 points on Friday. All the segments were up this week except Panamax index.&n ...
Sunday, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
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- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
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