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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
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
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Friday, 20 February 15
U.S. PRODUCED AROUND 19.2 MILLION SHORT TONS OF COAL WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.2 million short tons (mmst) of coal ...
Thursday, 19 February 15
PANAMAX: NOPAC AND AUSSIE ROUNDS ARE DONE IN LOW/MID $ 4000; TRIPS VIA INDONESIA TO INDIA CLOSER TO THE $5000 MARK - FEARNLEYS
Handy
The handy and supra market has not seen any firming rates in front of the Chinese New Year and still suffering on low activity in both hemi ...
Wednesday, 18 February 15
DRY BULK SHIPPING TO RECOVER IN LATE 2015 - DREWRY MARITIME RESEARCH
Strong trade growth, moderating fleet development and deployment of new fuel efficient vessels are expected to lead to a recovery in dry bulk shipp ...
Tuesday, 17 February 15
WHO PAYS THE SUEZ CANAL FEES? - INCE & CO
KNOWLEDGE TO ELEVATE
This was an appeal from an arbitration award on a point of construction in relation to the wording of an addendum to a ch ...
Tuesday, 17 February 15
BUOYANT WAVES IN RECENT YEARS: GLOBAL SHIP INVESTMENT SINCE THE CRASH - HELLENIC SHIPPING NEWS
Anxiety about fleet expansion is a recurring feature of world shipping markets. Within the global maritime community, worries about the vast amount ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
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- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
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- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
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- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
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- White Energy Company Limited
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- Power Finance Corporation Ltd., India
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- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
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- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
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- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- San Jose City I Power Corp, Philippines
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