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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 $70/t CFR (basis 62% Fe sinter fines)
- Global iron ore production 2201 million tonnes (2014)
- Global imports 1404 million tonnes (2014)
- Chinese imports 930 million tonnes (2014)
About Wood Mackenzie
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Monday, 02 March 15
FOB NEWCASTLE COAL SWAP ROSE 6.89% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.35 per MT (+6.89%) month over month and US$ 0.40 (0.78%) week on ...
Sunday, 01 March 15
BDI INDEX SLIGHTLY UP CAUSED AN INCREASE IN THE PANAMAX, SUPARAMAX AND HANDY SIZE INDICES
COALspot.com: The freight market saw some gains this week and BDI was up 5.26 pct closed at 540 points. However the Cape index failed to follow BDI ...
Friday, 27 February 15
WEEKLY US COAL PRODUCTION DOWN AN ESTIMATED 14.0% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 16.5 million short tons (mmst) of coal ...
Thursday, 26 February 15
DRY BULK MARKET COULD REBOUND FROM HISTORICAL LOWS IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market could exit from its historical lows in the coming weeks, as Chinese buyers reenter the market after the holiday celebrations. T ...
Thursday, 26 February 15
COAL POLICY RISK: HIGHER ROYALTIES FOR IUP HOLDERS - BAHANA SECURITIES | JAKARTA POST
The Energy and Mineral Resources Ministry plans to raise coal royalties charged to mining operation permit (IUP) holders by the end of the first qu ...
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- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- The University of Queensland
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- London Commodity Brokers - England
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
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