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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warned of a 20% fall in Chinese steel consumption over the next 15 years, as Beijing accelerates the shutdown of outdated and loss-making factories.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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Monday, 05 October 15
Q1' 16 CFR SOUTH CHINA COAL SWAP CLOSED US$ 48.05 PER TON
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down US$ 0.47 (0.96 %) per ton month over month.
A commodity swap is ...
Monday, 05 October 15
SMALL DECLINE IN 2014 SHIP OPERATING COSTS - MOORE STEPHENS
Total annual operating costs in the shipping industry fell by an average of 0.8% in 2014. This compares with the 0.3% average fall in costs recorde ...
Sunday, 04 October 15
THE INDO-INDIA FREIGHT MARKET REMAINS UNDER PRESSURE
COALspot.com: The BDI closed on Friday (2 Oct 2015) at 889 points, down by 54 points compared to previous Friday's closing ( 24 Sept 2015) of 9 ...
Friday, 02 October 15
COAL PRODUCTION IN THE UNITED STATES DECREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.5 million shor ...
Thursday, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- White Energy Company Limited
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
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