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Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
 COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & Mining Consultant for Wood Mackenzie says there is little to suggest the picture is likely to pick up in 2015 with demand set to remain "slower not lower" and therefore prices will remain low for longer.
Addressing delegates at the Mining Indaba conference in Cape Town, Mr Emslie asserts; "It’s hard to believe, but 2015 has started even worse than 2014 finished. Having commenced January just above US$70 a tonne , the TSI 62% Index was trading at US$62/t by the close of the month resulting in a monthly average of US$67/t CFR – its lowest since May 2009."
According to Wood Mackenzie's iron ore market outlook, demand is unlikely to show any meaningful improvement until late Q1 or early Q2 due to a combination of seasonal and cyclical reasons. Mr Emslie adds: "We have lowered our Q1-15 price forecast to US$67/t CFR and our CY-15 price to US$70/t CFR (basis 62% Fe sinter fines)."
Explaining Wood Mackenzie's short-term outlook in more detail Mr Emslie says: "Iron ore prices may be languishing at their lowest level for nearly six years, but it remains difficult to make a positive case for prices in the short term. Chinese steel mills have cut production in recent weeks due to a combination of weak demand and planned maintenance and this is feeding through directly to iron ore requirements. With the Lunar New Year holidays just a few weeks away Chinese steel production will get worse before it gets better. Steel mills will not re-stock in a falling or stagnant market and when they do there should be plenty of slack in the system, as shown by the high level of inventory held at Chinese mines.
Outside of China the picture is similarly uninspiring due to a combination of seasonal and structural factors. Other than the Middle East and India none of the major iron ore importers have shown any meaningful improvement in demand, a situation that is unlikely to change in the short term."
"The outlook for Q2 is marginally better: Chinese mills should start re-stocking post Lunar New Year, driven by seasonally stronger domestic demand and a pick-up in exports of steel products. This should coincide with slightly tighter seaborne supply as Australian exports reach a temporary plateau and high cost suppliers elsewhere remain out of the market."
Wood Mackenzie warns that if the iron ore price remains in the low $60/t range then more closures from mid-tier producers seem likely and more asset write-downs are a near certainty: "As recent announcements show, there’s only so far that cost cutting can go before difficult decisions need to be taken concerning the long term viability of a mine in a structurally oversupplied market," Mr Emslie adds.
So what led to the collapse in prices? "Australian exports surged ahead by approximately 140 million tonnes (Mt) in 2014 based on investment decisions made several years ago when prices were higher and the long term view was more bullish," says Mr Emslie, "As supply ramped up in 2014, Chinese steel demand did the unthinkable and contracted for the year creating a clear disconnect between supply and demand, marking a decisive turning point for iron ore."
On Chinese imports, which crucially account for 66% of the global total, Mr Emslie says: "2014 finished on a high for Chinese imports (in volume terms not value) with China importing a record 86.9Mt in December." The total value of Chinese imports (in US dollar terms) fell in 2014, despite the volume rising by over 100Mt. Mr Emslie explains; "China’s import bill for iron ore peaked at $112 billion in 2011 (when iron ore prices averaged $168/t) but have subsequently fallen by 16% to $95 billion in 2014. China should see another significant drop in its iron ore import bill in 2015 as significantly lower prices and freight costs more than offset higher volume. We currently forecast a 30Mt rise in Chinese imports of iron ore this year with strong growth in Australian shipments partially offset by price related cutbacks elsewhere."
Pointing to more recent to iron ore news from Australia in January Mr Emslie comments on the impact of sustained oversupply; "The series of announcements and data we've seen provides further evidence of the widening gap between the major miners and the rest of the supply chain. Fourth quarter production reports from Rio Tinto, BHP Billiton and FMG confirm that their low cost expansions are progressing well, paving the way for even higher output in 2015/16." Mr Emslie concludes; "The strong performance of the majors comes at the expense of relatively high cost mid-tier suppliers who are scaling back investment and cutting production in response to low prices and compressed margins."
Iron ore in numbers:
- Iron ore price forecast for Q1 2015 is $67/t CFR.For CY 2015 $70/t CFR (basis 62% Fe sinter fines)
- Global iron ore production 2201 million tonnes (2014)
- Global imports 1404 million tonnes (2014)
- Chinese imports 930 million tonnes (2014)
About Wood Mackenzie
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Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
Thursday, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Planning Commission, India
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
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