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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 $70/t CFR (basis 62% Fe sinter fines)
- Global iron ore production 2201 million tonnes (2014)
- Global imports 1404 million tonnes (2014)
- Chinese imports 930 million tonnes (2014)
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
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Wednesday, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
Monday, 05 January 15
CFR SOUTH CHINA COAL SWAPS GAINED WEEK OVER WEEK, SGX DATA SHOWS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 2.50 (-4.02%) month over month and gained US$ 0.20 ( ...
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- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- The University of Queensland
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
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