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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 $70/t CFR (basis 62% Fe sinter fines)
- Global iron ore production 2201 million tonnes (2014)
- Global imports 1404 million tonnes (2014)
- Chinese imports 930 million tonnes (2014)
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
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Tuesday, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- MS Steel International - UAE
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
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