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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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Tuesday, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
Tuesday, 03 March 15
Q4' FOB INDONESIA COAL SWAP CLOSED 2% LOWER COMPARED TO Q2 CLOSING PRICE OF $ 47.47
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose month on month and declined week over week.
The Q2 swap increased US$ 2.24 ...
Tuesday, 03 March 15
FOB RICHARDS BAY COAL SWAPS: Q2 UP 9.60%; Q3 UP 9.75% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and week on week.
The Q2 swap has soared US$ 5 ...
Monday, 02 March 15
CFR SOUTH CHINA COAL SWAP FOR Q2 DELIVERY REACHED $ 57.50 PMT W/E 27 FEB 2015
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.37 (+2.44%) per MT month over month and declined US$ 0.42 ...
Monday, 02 March 15
BORYEONG POWER PLANT OF KOMIPO TO IMPORT 140K OF SUB-BITUMINOUS COAL FOR Q2
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 140,000 (70 ...
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- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Australian Coal Association
- The University of Queensland
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
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