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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warned of a 20% fall in Chinese steel consumption over the next 15 years, as Beijing accelerates the shutdown of outdated and loss-making factories.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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Wednesday, 30 September 15
Q1'16 FOB INDONESIA COAL SWAP FALLS $1.25 A TON AS SLIDE CONTINUES
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 0.72 (-1.78%) per t ...
Wednesday, 30 September 15
NEW BUILDING MARKET INSIGHT
COALspot.com: This year has been, beyond any doubt, a rather strenuous one for the newbuilding market. Ordering activity with regards to Dry Bulker ...
Tuesday, 29 September 15
FOB RICHARDS BAY COAL SWAPS ARE SLIDING
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 declined week over week and month over month.
The Q4 swap was down US$ ...
Monday, 28 September 15
API 5 FOB NEWCASTLE COAL SWAPS UP $2.15 IN ONE MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery increased $2.10 per ton (5.15%) month over month to US$ 42.93 per ton. The ...
Monday, 28 September 15
CAPESIZE FLEET INCREASES BY JUST 1 VESSEL DURING LAST 12 MONTHS, IN POSITIVE SIGN FOR DRY BULK SHIPPING MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
After a rather tumultuous period, the shipping industry and more particular the dry bulk market has started to adjust to the new realities of globa ...
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- Madhucon Powers Ltd - India
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
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