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Wednesday, 04 November 15
MARKET INSIGHT - CHRISTOPHER THOMAS WHITTY
 Four companies dominate global iron ore production, namely; BHP Billiton, Vale, Rio Tinto, and Fortescue Metals Group. Together these companies control more than 70 percent of the seaborne iron ore market.
The price of iron ore edged to $US49.95/ ton on Wednesday, nearing a four-month low but still the two major producers in Australia and Brazil have been following through with their longstanding plans to increase production. The low iron ore price also comes as China’s official forecaster warned of a 20% fall in Chinese steel consumption over the next 15 years, as Beijing accelerates the shutdown of outdated and loss-making factories.
Rio Tinto in Australia and Vale in Brazil, are still ramping up production. For the first nine-months of 2015, Vale’s production overall is around 8 million metric tons higher than Rio Tinto’s at 248 million metric tons, while Vale’s shipments are just over 3 million metric tons higher.
Of course Australian miners still have an advantage in delivered costs to China, the main importer for iron ore. For example, Capesizes hauling the commodity from Brazil to China last week saw rates around $12/ton for the Tubarao/Qingdao route, while from Rio Tinto’s Dampier terminal in Western Australian, freight rates were slightly in excess of $5.10/ton.
It is quite interesting to see that current iron ore prices aren’t worrying Rio Tinto. Their CEO, Andrew Harding, said he’s not losing sleep, because the business line, like the miner itself, is in for the long haul. He reasons that populations will continue to grow and develop, especially in Asia and iron ore will be needed to serve their needs. In September, Rio Tinto said its modelling showed that the world would need three billion tons of iron ore by 2030.
On the other side of the world, Vale is also quite confident in their iron ore division after releasing their third quarter results for 2015. Their highlight is the significant cost cutting during this period, which made Vale, the company with the lowest production cost/ton in the entire sector, reach an unprecedented cost level of $ 12.7/ton of iron ore. They are trailing faster growth compared to Australian majors, who this year posted stronger increases to volumes from new capacity ramp-ups.
This is an oversupplied market that is obviously affected by the shrinking Chinese steel demand. On the other hand, oversupplied ore trade also creates opportunities for the large players, since it means that certain high-cost producers will struggle to survive. Some iron ore mines, such as those in Canada, China and Africa, have already buckled under the pressure.
Nevertheless, producers with operating costs that are far below current iron ore prices are very well-positioned to take market share in the long term. Now if several high-cost producers exit the industry, it would be quite difficult for them to re-commence operations.
Over the long term, the low-cost iron mines could potentially fill the gap that remains after smaller companies exit the market. The gain in market share will likely increase margins, operating cash flow and profits. Hopefully this could also change the dynamics in the market and positively affect the demand for seaborne trade.
By Christopher Thomas Whitty
Marketing Manager, Towage & Port Agency
Cotzias Intermodal Shipping
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Thursday, 19 November 15
CHINA STEEL PRODUCTION CAPACITY TO PEAK IN 2016 - FITCH RATINGS
COALspot.com: Fitch Ratings today says that China's steel production capacity is likely to peak in 2016, with capacity elimination over the nex ...
Thursday, 19 November 15
Q3' 16 RICHARDS BAY COAL SWAP CLOSED 9% LOWER THAN Q1' 16 DELIVERY PRICE
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up week over week and month over month.
The Q1’ 2016 swa ...
Thursday, 19 November 15
RATES FOR CAPES KEPT MOVING SOUTH - INTERMODAL
COALspot.com: With the BDI currently standing at less than 30 points above the historical lows marked in February this year and with activity acros ...
Wednesday, 18 November 15
MARKET (SHIPPING) INSIGHT - THEODORE NTALAKOS
Supply VS Demand
According to data from the IMF, global growth for 2015 is projected at 3.1 percent, 0.3 percentage point lower than in 2014, ...
Tuesday, 17 November 15
KOMIPO INVITES BIDS FOR (SEMI) ANTHRACITE COAL FOR SEOCHEON POWER PLANT
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 70,000 Metric Tons of (Semi) Anthracite for Ja ...
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- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- PTC India Limited - India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
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