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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warned of a 20% fall in Chinese steel consumption over the next 15 years, as Beijing accelerates the shutdown of outdated and loss-making factories.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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Sunday, 25 October 15
ANOTHER DISAPPOINTING WEEK FOR PANAMAX; INDEX FELL 5.4 PERCENT W-W
COALspot.com: The BDI was slightly up by 2.65 pct closing at 774 points mainly because of Cape index which was up by 10.85 pct closing at 1461 poin ...
Sunday, 25 October 15
DRY BULK SHIP OWNERS ARE LOOKING TO CHINA'S POLICIES FOR CUES ON FUTURE MARKET DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China’s hard or softer landing is a thing which has troubled dry bulk shipping for a couple of years now, as owners have been hit by the coun ...
Friday, 23 October 15
WILL INDIAN DOMESTIC COAL PRICES BE ABLE TO COMPETE IMPORTED COAL PRICES IF THE CURRENT TREND CONTINUES?
COALspot.com: The Most of the Indian end-users are waiting for last minute purchase to enjoy every drop in price. Coal procurement managers are als ...
Friday, 23 October 15
COAL PRODUCTION IN THE U.S. FOR THE WEEK ENDING OCTOBER 17 DECLINED FOR THE SECOND STRAIGHT WEEK
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.6 million shor ...
Wednesday, 21 October 15
RUSSIA'S CARBO ONE COAL SALES TO HIT 50 MLN T/YR - JACQUELINE HOLMES
COALspot.com: Russia's Carbo One has become one of the world's leading physical coal traders with an annual volume approaching 50 million t ...
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- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- MS Steel International - UAE
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- The University of Queensland
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
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