• About Angela Chao
  • Career in Shipping
    • Different Career Paths in Shipping
      • Deck Officer
      • Freight Analyst
      • Marine Engineer
      • Ship Broker
      • Shipbuilder
    • Education Facilities and Programs
    • How to Get started
  • Contact Angela

Angela Chao Blog

~ International Shipping and Transportation

Angela Chao Blog

Tag Archives: iron ore

A Lot of Action but Does It Mean the Market Is Improving?

15 Monday Jun 2015

Posted by Angela Chao in Dry bulk shipping

≈ 2 Comments

Tags

American crude oil situation, China, coal usage, Crude Oil, Indonesia, iron ore, Iron ore shipping vessels, South America

It is too soon to know for sure if we have turned the corner on the gloom period, but there are many interesting benchmarks from the first quarter of 2015 to give cause for a little optimism.

Growing Market

Crude Oil

Let’s look at the American crude oil situation, for example. In spite of predictions of a weakening or flattening market, US crude oil output actually rose in May to a level not seen in 43 years. Output reached 9.6m b/d. End-user demands, such as from US refineries is pushing this surge, as is evidenced by the fact that more than 1m b/d of oil is being consumed than supplied from imports and domestic producers. These positive indicators have caused a slight uptick in the futures market, but it is yet to be borne out if this is warranted, as inventory remains flush.

Continue reading →

Global Geopolitical Turmoil is not Raising Commodity Prices

07 Tuesday Oct 2014

Posted by Angela Chao in Dry bulk shipping

≈ 6 Comments

Tags

falling prices, Global Geopolitical Turmoil, growing vessel capacities, iron ore, political economy, shipping industry

iron ore delivered to China

Iron ore delivered to China

One might expect the turbulent political economy to cause a spike in commodity prices but thus far such a reaction to the many global threats has not materialized. In fact, the opposite has occurred as we see commodity prices coming down across the spectrum. The Bloomberg Commodity Index, which tracks prices for 20 commodities fell to its lowest point in four years. Industry analysts point to over-supply and a general lessening of demand for many products, including iron ore and crude oil. WTI is down to $93 per barrel and Brent at $97 per barrel.

Of significance is declining demand for iron ore in key markets. For instance, iron ore delivered to China is at a five-year low and in Australia, iron ore prices fell below $79 per ton. To compound matters, at this time when the market is already suffering from too much supply and tightening demand, the major miners are increasing their production. China’s market has tightened considerably as steel producers have slowed down. Furthermore, according to the China Iron and Steel Association, China’s overall economic slowdown is contributing to the bleak picture faced today by iron ore producers. Major minors, such as BHP and Rio, have reduced their production costs to $20-30 per ton, allowing them to lower prices, serving only to hurt worldwide producers saddled with higher production costs, such as Mexico, China, Iran, Indonesia and Africa. Even Chinese miners are churning out increased product, by as much as 10%, in spite of all the reasons to do otherwise.

Continue reading →

The Global Economy and Its Impact on the Dry Cargo Market

09 Tuesday Sep 2014

Posted by Angela Chao in Dry bulk shipping

≈ 1 Comment

Tags

Chinese market, economy, global economy, global supply, iron ore, production, steel production

The global economy is supposed to be in a recovery phase but you would never know it from commodity prices, which continue to fall. The best assessment is that decisions to increase production, made when the economy was stronger, have resulted in new products arriving to a weaker market. All sectors are affected, including iron ore, oil and shipping vessels.

Dry Cargo

Iron ore, oil and shipping vessels are all affected from global economy

Australian 62%-Fe iron ore, an industry benchmark, fell to its lowest point in two years. It is down to $88 per ton, a total drop of 35% for the year. This is one example of how the increased global supply is affecting commodities.

A secondary factor is the stagnating Chinese market, where steel production slowed considerably and inventories are high. Current government policies have not been able to improve the situation. Case in point is the government’s reaction to a housing bubble which began in 2008 with a stimulus package, driving up debt from 140% of GDP at the end of 2008 to 250% by the middle of this year. BHP, Rio and Vale, the largest three iron ore miners, have responded by curtailing investments in new production, but it will take some time before this helps the situation.

Continue reading →

Iron Ore Prices Tumbling in 2014

03 Thursday Jul 2014

Posted by Angela Chao in Dry bulk shipping

≈ 6 Comments

Tags

Asian still industry, China, chinese steel industry, iron ore, steel

To date, the 2014 iron ore price indicators are less than optimistic. Iron ore prices have fallen to a low of $89 per metric ton earlier this year, before bouncing back to $90s, but still off substantially from iron ore price highs, down more than 30% from the not so distant past.

Many factors are weighing in to contribute to this rather lackluster performance. The Asian steel industry, most prominently China’s has slowed down. China’s steel output grew only 5% over the first four months of 2014 compared to the same period in 2013. This is a significant drop from the 9% growth experienced in the first four months of 2013 compared to the first four months of 2012. At the same time, while the demand has fallen off, iron ore production has increased compounding the pricing weakness.

China's steel market is improving, and demand is picking up

China’s steel market is improving, and demand is picking up

Australia is the world’s leading supplier of iron ore, followed by Brazil, with a total of 76% of the world’s iron ore supply between them. Following behind are Sweden, Canada and South Africa. In 2013, of the total global shipments of iron ore, 85.5% headed to Asian ports. China received the most, with 66.9% of total imports, followed by Japan, South Korea and Taiwan. So, a slowdown in these markets has significant impact on the movement of iron ore product. Also, with Australia as a leading supplier, and its close proximity to the Asian ports, this means shorter shipping routes, which does not contribute to the tonne-mile multipliers that drive up shipping rates.

Continue reading →

No Longer Under the Onus of a Mining Ban, India Is Set to Maximize Its Iron Ore Production

25 Sunday May 2014

Posted by Angela Chao in Dry bulk shipping

≈ 4 Comments

Tags

Coal Mining, Goa, hematite, illegal mining, India, Indian economy, iron ore, magnetite, mining ban

India has a strong history of being a world leader in iron production and exports

India has a strong history of being a world leader in iron production and exports (image by Soman from Wikipedia)

India is one of the world’s leading producers of iron ore. However, a court-imposed ban on mining from the state of Goa, one of the most productive export states in the country, caused a significant drop in India’s output of iron ore. The ban was instituted more than 19 months ago on mines in Goa, Karnataka, as well as other states, to deal with problems of illegal mining. Mining production was capped at 20 million tons. Last month, the Supreme Court lifted the ban and iron ore production is expected to soar to 284Mt in 2020. This represents significant increase from the 142.9 million tons produced in 2013.

India has a strong history of being a world leader in iron production and exports. It benefits from rich iron ore resources, with more than 28.5 billion tons of magnetite (Fe304) and hematite (Fe203) located primarily in eastern and southern India. There were 336 mines in 2010. This number fell to 294 in 2012, during the time of the mining ban, of which 260 were privately owned and 34 were owned by governmental entities.
Continue reading →

China continues to dominate world economy

06 Thursday Feb 2014

Posted by Angela Chao in Dry bulk shipping

≈ 23 Comments

Tags

China’s domestic growth, China’s mining industry, energy resource development, freight rates, iron ore, mining activity, shipping costs, steel consumption

China’s stature as an international powerhouse can be felt in economic markets across the globe. China’s domestic growth and increasing consumption is driving commodity prices, shipping costs, mining activity, steel consumption, and energy resource development. Most influenced are dry bulk shipping prices, especially iron ore and coal, central to China’s steel production.

vortex

Mid-December market analyses of several sectors show the degree of China’s influence. Prices for iron ore entering China, for instance, were holding steady at $140 per ton, exceeding even the expectations of the world’s leading mining companies who with each passing year are exporting more of their raw materials to China: Vale, Rio and BHP. The high prices were felt across China’s mining industry, some more deeply than others as they faced production costs of as much as $170 per ton. Over the first 11 months of 2013, China’s cumulative iron ore imports increased by 11%. September and November were record months, with 74.6 metric tons and 77.8 metric tons respectively, a significant jump from October’s total imports of 67.8 metric tons. Forecasters expect that a total of 801 metric tons will have reached China’s ports by the end of 2013, representing 67% of the 1,197 metric tons forecasted to reach ports in the rest of the world. China’s population growth combined with a healthy economy and busy construction industry are pushing up her per capital consumption of steel. As a consequence, the BCI 4TC index rose from a daily average of $6,136 in the first half of 2013 to $22,016 in the second half (as of 13 December). Continue reading →

2014 Expect to Be a Good Year for Shipping

28 Tuesday Jan 2014

Posted by Angela Chao in Dry bulk shipping

≈ 7 Comments

Tags

Baltic Exchange, BDI, Cape Providence, Capesizes, Cargo vessels, Chinese New Year, dry bulk carriers, Eilhard Schulte, iron ore, Sea Peace, shipping rates

Despite a free fall in the BDI since the beginning of the year, most forecasters are still optimistic that dry bulk shipping will be better than in 2012 and 2013. Since January 2, the first day of 2014 that the BCI was published, rates have tumbled to two-thirds, falling from over $35,000 per day to just over $10,000 per day.

Chinese new year decorations

Chinese New Year is just around the corner (photo by Kittikun Atsawintarangkul)

Capesizes in particular, the largest segment of dry bulk carriers published by the Baltic Exchange, fell in large part due to unexpectedly poor weather which interfered with iron ore loading operations in key countries and ports for iron ore export in Australia and Brazil. There is also the seasonal downturn with Chinese New Year just around the corner, and so the slide, to some degree, is seasonal and was to be expected. Continue reading →

Capesize iron ore freight rates falling due to decreased cargo

23 Thursday Jan 2014

Posted by Angela Chao in Dry bulk shipping

≈ 2 Comments

Tags

Capesize rates, iron ore, iron ore cargo, iron ore freight rates, Iron ore shipping vessels, Pacific and Atlantic, Singapore shippers, weather conditions

Iron ore shipping vessels are feeling a pinch as cargo has diminished over the early winter season. Capesize iron ore freight rates in the Pacific and Atlantic have taken a corresponding tumble. Some iron ore shipping vessels are finding themselves without any cargo. It is reported that as many as 30 shipping vessels were in the Pacific seeking iron ore cargo.

The primary cause appears to be a slowdown in iron ore cargo coming out from Brazil and West Australia, which precipitated lower priced fixtures out of South Africa. Vale, a Brazilian miner, contributes their slowdown to weather, noting that the wet season significantly affected cargo activity. Continue reading →

Iron Ore Prices Continue Their Gradual Climb — Will This Continue?

08 Sunday Dec 2013

Posted by Angela Chao in Dry bulk shipping

≈ Leave a comment

Tags

China Iron & Steel Association, China's steel producers, Dalian Commodity Exchange, demand for shipments, iron ore, raw material, Steel Index

Iron ore scheduled for May 2014 delivery finished the month of November 0.2% higher in active trading on the Dalian Commodity Exchange. Climbing almost 2% for the month, the most traded iron ore was selling at 939 yuan per ton. This would be the largest gain since August, due in large part to the stockpiling of raw material by China’s steel producers.

All of this is good news for Rio Tinto and Vale, leaders in the iron ore mining industry, supplanting any losses they might see from copper sales, where the prices fell by as much as 3% in November. Continue reading →

Baltic Capesize Index (BCI) Showing Fine Supply/Demand Balance

20 Wednesday Nov 2013

Posted by Angela Chao in Dry bulk shipping

≈ Leave a comment

Tags

Baltic Capesize Index, Capesize rates, dry bulk market, iron ore, Panamax rates, steel

After a heated rise starting in mid-August through September which saw capesize rates more than double and almost triple, the month of October, and in particular the second half of October saw a step back as the market excitement cooled down and took a breather.

Only 95 ships acquired cargos during the four weeks ending on 28 October, compared to 162 during the previous 4-week period. Demand for steel remained depressed, pushing down the Chinese HRC prices to $570/ton, a drop from $600/ton at the beginning of September. Continue reading →

← Older posts

Social

  • View angelachaocff’s profile on Facebook
  • View AngelaAChao’s profile on Twitter
  • View angela-chao-57848163’s profile on LinkedIn
  • View angelachao1’s profile on YouTube

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 342 other followers

About Me

Angela Chao
Chairman and C.E.O. of Foremost Group, a leading shipping and trading enterprise, Angela Chao is an active businesswoman who serves on several boards and loves to volunteer. Angela comes from a loving and supportive family of Chinese descent. The Chao family dedicate themselves to serving and contributing to society.

Read More

Recent Posts

  • A Review of Dry Bulk Shipping Performance and Its Challenges in 2016
  • Several Indicators Point to Long-Term Recovery in Capesize Market
  • Is Obsession with Brexit Creating a Blind-spot for Economists?
  • Angela Chao’s Mixed Bag of News for the Dry Bulk Shipping Industry
  • Consolidations in China’s Steelmaking Industry are Healthy and Necessary

Categories

  • Baltic Dry Index
  • Dry bulk shipping
  • Shipping Events

Tags

Baltic Capesize Index BDI Capesize rates China Chinese economy coal imports coal shipping Crude Oil Dalian Commodity Exchange dry bulk market dry bulk shipping dry bulk shipping market freight rates iron ore Iron ore prices iron ore shipping Iron ore shipping vessels shipping industry steel steel industry

Blog at WordPress.com.

Cancel

 
Loading Comments...
Comment
    ×