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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, 27 January 15
Q1 FOB INDONESIA COAL SWAP CLOSED AT $ 47.87 FOR WEEK ENDING JAN. 23
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 gain week over week and declined month on month.
The Q1 swap has decline US$ 0.9 ...
Tuesday, 27 January 15
Q2 FOB NEWCASTLE COAL SWAP UP 4.5% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 0.28 per MT (-0.54%) month over month and increased US$ 1.23 ( ...
Monday, 26 January 15
OVERSUPPLY, AMPLE STOCKPILES, AND LACKLUSTER UNDERLYING STEEL DEMAND KEPT COKING COAL PRICES LOW IN 2014
COALspot.com: Coking coal prices (FOB & CFR) fell 15% and 18% respectively during the year, amidst persistent oversupply, ample inventory and s ...
Monday, 26 January 15
FOB RICHARDS BAY Q2 COAL SWAP CLOSED LOWER THAN Q1 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has fell ...
Monday, 26 January 15
API 8 CFR SOUTH CHINA COAL SWAP CONTINUE TO SLIDE M-O-M; ROSE W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 0.79 (-1.33%) per MT month over month and gained US$ 2.10&nb ...
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- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Economic Council, Georgia
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
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