Thursday, 15 Sep 2011
It is reported that an increasing number of investment banks are poised to muscle into the trading of physical iron ore a business long dominated by trading houses lured by the market’s huge size and its shift to a more transparent pricing system.
Mr Colin Hamilton Macquarie analyst said “The global market volume is a major incentive, the iron ore market dwarfs any other metals and now they have a functioning financial market.”
He said that “The majority of the commodities banks including Macquarie are looking at physical iron ore.”
About 1bn tonnes of sea borne iron ore are traded every year with about 20-30% sold on the spot market and the rest sold in long-term contracts. The banks may never match trading houses in this market, because their risk limits will curb both speculative trading and deals in some risky parts of the world.
Even so banks will build their physical iron ore businesses for several reasons. Involvement in this market will help them to limit risk in their burgeoning iron ore derivatives businesses as well as to forge deals to finance companies in the booming mining business.
Mr Abe Ulusal a trader at Mitsui Bussan Commodities said “Having access to the physical material will give banks more leverage and will limit their risk on the derivatives side.”
After pioneering iron ore derivatives trading, Deutsche Bank started trading physical iron ore in 2010. Other banks such as Citi and Goldman Sachs are now following.
Iron ore swaps trading started in 2008 but began to gain more traction in 2010, when iron ore miners dumped a decades old annual price benchmark system and moved to pricing in the shorter term.
Iron ore swaps allow producers, consumers and financial market participants to hedge or bet on prices in the future.
The volume of swaps cleared on the Singapore Exchange reached a record annualised level of almost 50 million tonnes last month and although it is still small compared with the physical market and it is growing quickly.
(sourced from Gulf-Times)
Showing posts with label physical. Show all posts
Showing posts with label physical. Show all posts
Thursday, September 15, 2011
Monday, August 22, 2011
Iron Ore-Shanghai rebar steady, firm Chinese demand
Mon Aug 22, 2011
* Shanghai rebar flat after falling 1 pct in past 2 days
* Spot iron ore prices extend gains
By Manolo Serapio Jr
SINGAPORE, Aug 22 (Reuters) - China steel futures steadied on Monday after two sessions of losses, reflecting outlook for firm demand in the world's biggest consumer which has supported prices of key steelmaking ingredient iron ore.
The most-traded January rebar contract on the Shanghai Futures Exchange was flat at 4,814 yuan per tonne by the midday break, after falling 1 percent in the past two trading days.
Strong steel demand in China's construction sector has propped up rebar prices, encouraging mills to buy more iron ore.
"Demand from cheap housing will consume part of the surplus capacity. Almost all steel mills in China are now in full operation," said an iron ore trader in China's eastern Shandong province.
Daily steel output in China, also the world's No. 1 steel producer, has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year.
Rebar prices in the physical market, currently at around 4,770 yuan per tonne, may rise to more than 5,000 yuan during the remaining months of the year, the trader said.
Iron ore purchases are likely to extend this week with China's steel output expected to stay strong. Last week, there was brisk demand for Australian cargoes amid limited Indian supplies.
"Demand for Australia's iron ore is likely to hold up as long as steel demand in China remains robust," Commonwealth Bank of Australia said in a note.
"As long as China's steel output remains robust, and iron ore supply relatively tight, we currently see a supportive environment for iron ore pricing," the bank said, noting that Chinese steel prices remained well bid in recent months.
Iron ore with 62 percent iron content rose 0.4 percent to $179.50 a tonne on Friday, based on Platts index IODBZ00-PLT, matching the Aug. 4 level.
The reference price at The Steel Index .IO62-CNI=SI gained 0.1 percent at $177.30 a tonne and Metal Bulletin's gauge .IO62-CNO=MB edged up less than 0.1 percent to $177.44.
"Inquiries have increased and I think we'll see more mills restocking this week. But I think some buyers are also being cautious given the uncertainty over the global economy," said a Singapore-based iron ore trader.
Offers for imported iron ore in China were steady on Monday, with Australian Newman 62-percent grade fines at $181-$183 a tonne, including freight, and Indian 63.5/63 grade ore at $185-$187, according to Chinese consultancy Umetal.
In the futures market, the most-traded August iron ore contract on the Singapore Mercantile Exchange was unchanged at $177.50 a tonne.
Volumes traded on SMX's iron ore futures had been thin since the bourse launched the contract on Aug. 12 with market participants opting for widely-traded swaps instead.
(sourced Reuters)
* Shanghai rebar flat after falling 1 pct in past 2 days
* Spot iron ore prices extend gains
By Manolo Serapio Jr
SINGAPORE, Aug 22 (Reuters) - China steel futures steadied on Monday after two sessions of losses, reflecting outlook for firm demand in the world's biggest consumer which has supported prices of key steelmaking ingredient iron ore.
The most-traded January rebar contract on the Shanghai Futures Exchange was flat at 4,814 yuan per tonne by the midday break, after falling 1 percent in the past two trading days.
Strong steel demand in China's construction sector has propped up rebar prices, encouraging mills to buy more iron ore.
"Demand from cheap housing will consume part of the surplus capacity. Almost all steel mills in China are now in full operation," said an iron ore trader in China's eastern Shandong province.
Daily steel output in China, also the world's No. 1 steel producer, has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year.
Rebar prices in the physical market, currently at around 4,770 yuan per tonne, may rise to more than 5,000 yuan during the remaining months of the year, the trader said.
Iron ore purchases are likely to extend this week with China's steel output expected to stay strong. Last week, there was brisk demand for Australian cargoes amid limited Indian supplies.
"Demand for Australia's iron ore is likely to hold up as long as steel demand in China remains robust," Commonwealth Bank of Australia said in a note.
"As long as China's steel output remains robust, and iron ore supply relatively tight, we currently see a supportive environment for iron ore pricing," the bank said, noting that Chinese steel prices remained well bid in recent months.
Iron ore with 62 percent iron content rose 0.4 percent to $179.50 a tonne on Friday, based on Platts index IODBZ00-PLT, matching the Aug. 4 level.
The reference price at The Steel Index .IO62-CNI=SI gained 0.1 percent at $177.30 a tonne and Metal Bulletin's gauge .IO62-CNO=MB edged up less than 0.1 percent to $177.44.
"Inquiries have increased and I think we'll see more mills restocking this week. But I think some buyers are also being cautious given the uncertainty over the global economy," said a Singapore-based iron ore trader.
Offers for imported iron ore in China were steady on Monday, with Australian Newman 62-percent grade fines at $181-$183 a tonne, including freight, and Indian 63.5/63 grade ore at $185-$187, according to Chinese consultancy Umetal.
In the futures market, the most-traded August iron ore contract on the Singapore Mercantile Exchange was unchanged at $177.50 a tonne.
Volumes traded on SMX's iron ore futures had been thin since the bourse launched the contract on Aug. 12 with market participants opting for widely-traded swaps instead.
(sourced Reuters)
Tuesday, March 29, 2011
Newcastle sellers place Japan's coal cargoes into India, China
Mar25, 2011
Perth (Platts)- Chinese and Indian coal buyers were carefully weighing up offers for Australian thermal coal this week as sellers were forced to look beyond their regular customers in Japan for new markets to accommodate spare export cargoes from Newcastle port.
Market participants drew attention to an apparent disparity between the prices for spot cargoes of Newcastle thermal coal in the over-the-counter physical market, and prices for Newcastle thermal coal cargoes being quietly offered to Indian and Chinese coal buyers.
Spot Newcastle cargoes were heard offered in the Indian market at prices around the $115/mt FOB level, while in the over-the-counter market bids were reported in the low-to-mid $120s/mt FOB Newcastle.
There weren't any trades for Newcastle thermal coal on trading platform globalCOAL in the period March 21 to the close of the Asian trading window on March 25, the last Newcastle trade having occurred for 135,000 mt for April delivery at $120.50/mt FOB on globalCOAL March 18.
"Newcastle cargoes are being offered to buyers in India," one market source confirmed.
A second market source said Newcastle thermal coal for delivery in the next 90 days was being offered in Capesize cargoes to Indian buyers in order to make its shipment cost from Australia attractive.
Panamax vessel freight from eastern Australia to India was trading around $21/mt last week, and rates for Capesize vessel freight for the same voyage were likely to be significantly lower.
"There are a lot more varieties of coal in the Indian market, including Australian coal and Russian coal," a third market source observed wryly.
Potential buyers in China for spot cargoes of Newcastle thermal coal were said to have been offered price discounts of at least $10/mt to current spot market prices on distressed cargoes of 6,000 kcal/kg NAR Newcastle thermal coal.
In the case of both Chinese and Indian buyers, they were said by market sources to be holding out for attractive price offers for Newcastle thermal coal cargoes.
"Buyers are biding their time to see if they can get a good deal," said the first market source.
The second market source struck a similar chord, saying: "People are waiting for a correction in the market." CANCELED SHIPMENTS
Two of Japan's largest power utilities, Tokyo Electric and Tohoku Electric, declared force majeure on their deliveries of thermal coal from Newcastle port in eastern Australia shortly after the country was tragically struck by an earthquake and tsunami on March 11.
These Japanese customers are unable to accept imported cargoes of Newcastle thermal coal because of damage to their unloading ports.
"A few vessels were declared force majeure by Japanese utility companies around loading ports, and fixed to other business in the market. The number should be two to three vessels maximum and happened last week," said a fourth market source.
"Clearly the two largest JPUs cannot take any more coal. Tokyo and Tohoku's total coal consumption is 60 million metric tons [per year], and quite a large proportion of this is likely to be canceled," said a fifth market source.
"At the moment, they are simply canceling shipments because they cannot physically take any more coal as their port facilities are damaged," he stated.
Japan's imports of thermal coal were running at 125 million mt/year prior to the earthquake and some market commentators believe Japan's overall demand for thermal coal could drop by 12 million mt in 2011, or 10%.
Some recent Newcastle thermal coal shipments destined for Tokyo or Tohoku have been redirected to other Japanese power utilities such as Hokuriku and J-Power, or to Japanese industrial end-users.
Other cargoes were said to have been offered for resale to customers in other parts of Asia.
"Some of the cargoes will be diverted to China, South Korea or Taiwan. I think that at these prices it's hard to do [Newcastle] cargoes to China, but Chinese domestic coal prices have been creeping up," said a sixth market source.
Some market sources expect the disruption from the Japanese earthquake and tsunami and their after effects to linger for possibly many months if not years. "More than half of their coal plants cannot be re-commissioned and we don't know for how long this will last, it could be six months or a year," said the fifth market source referring to Tokyo and Tohoku. (The Platts)
Perth (Platts)- Chinese and Indian coal buyers were carefully weighing up offers for Australian thermal coal this week as sellers were forced to look beyond their regular customers in Japan for new markets to accommodate spare export cargoes from Newcastle port.
Market participants drew attention to an apparent disparity between the prices for spot cargoes of Newcastle thermal coal in the over-the-counter physical market, and prices for Newcastle thermal coal cargoes being quietly offered to Indian and Chinese coal buyers.
Spot Newcastle cargoes were heard offered in the Indian market at prices around the $115/mt FOB level, while in the over-the-counter market bids were reported in the low-to-mid $120s/mt FOB Newcastle.
There weren't any trades for Newcastle thermal coal on trading platform globalCOAL in the period March 21 to the close of the Asian trading window on March 25, the last Newcastle trade having occurred for 135,000 mt for April delivery at $120.50/mt FOB on globalCOAL March 18.
"Newcastle cargoes are being offered to buyers in India," one market source confirmed.
A second market source said Newcastle thermal coal for delivery in the next 90 days was being offered in Capesize cargoes to Indian buyers in order to make its shipment cost from Australia attractive.
Panamax vessel freight from eastern Australia to India was trading around $21/mt last week, and rates for Capesize vessel freight for the same voyage were likely to be significantly lower.
"There are a lot more varieties of coal in the Indian market, including Australian coal and Russian coal," a third market source observed wryly.
Potential buyers in China for spot cargoes of Newcastle thermal coal were said to have been offered price discounts of at least $10/mt to current spot market prices on distressed cargoes of 6,000 kcal/kg NAR Newcastle thermal coal.
In the case of both Chinese and Indian buyers, they were said by market sources to be holding out for attractive price offers for Newcastle thermal coal cargoes.
"Buyers are biding their time to see if they can get a good deal," said the first market source.
The second market source struck a similar chord, saying: "People are waiting for a correction in the market." CANCELED SHIPMENTS
Two of Japan's largest power utilities, Tokyo Electric and Tohoku Electric, declared force majeure on their deliveries of thermal coal from Newcastle port in eastern Australia shortly after the country was tragically struck by an earthquake and tsunami on March 11.
These Japanese customers are unable to accept imported cargoes of Newcastle thermal coal because of damage to their unloading ports.
"A few vessels were declared force majeure by Japanese utility companies around loading ports, and fixed to other business in the market. The number should be two to three vessels maximum and happened last week," said a fourth market source.
"Clearly the two largest JPUs cannot take any more coal. Tokyo and Tohoku's total coal consumption is 60 million metric tons [per year], and quite a large proportion of this is likely to be canceled," said a fifth market source.
"At the moment, they are simply canceling shipments because they cannot physically take any more coal as their port facilities are damaged," he stated.
Japan's imports of thermal coal were running at 125 million mt/year prior to the earthquake and some market commentators believe Japan's overall demand for thermal coal could drop by 12 million mt in 2011, or 10%.
Some recent Newcastle thermal coal shipments destined for Tokyo or Tohoku have been redirected to other Japanese power utilities such as Hokuriku and J-Power, or to Japanese industrial end-users.
Other cargoes were said to have been offered for resale to customers in other parts of Asia.
"Some of the cargoes will be diverted to China, South Korea or Taiwan. I think that at these prices it's hard to do [Newcastle] cargoes to China, but Chinese domestic coal prices have been creeping up," said a sixth market source.
Some market sources expect the disruption from the Japanese earthquake and tsunami and their after effects to linger for possibly many months if not years. "More than half of their coal plants cannot be re-commissioned and we don't know for how long this will last, it could be six months or a year," said the fifth market source referring to Tokyo and Tohoku. (The Platts)
Monday, March 14, 2011
Vale opens lab to test iron ore in Oman
Monday, 14 Mar 2011 |Timesofoman
Vale inaugurated a new laboratory designed to test iron ore, raw materials and direct reduction pellets using quality assurance processes.
The laboratory utilizes innovative designs with advanced automation and interface solutions including Laboratory Information Management System. These processes will help minimize and manage errors through the application of suitable corrective measures to ensure consistent quality pellets for steel customers in the region.
Mr Marcus Beluco COO stated that “This inauguration marks the culmination of over two years of intensive planning. The laboratory will seamlessly incorporate new testing and innovative processes to the palletizing and steel industries, contributing to the development of quality assurance and customer service.”
He added that “The laboratory will also allow the achievement of optimum sample flow by managing process changes in a more advanced manner while maintaining ISO standards.”
Spread over two floors, the laboratory consists of physical, chemical and metallurgical sections each designed to test specific characteristics of the pellets. In addition, the new facility is equipped with spectrometers, specialized furnaces, a waste water treatment system and gas detectors.
The laboratory is managed by a team of experienced professionals including young Omani graduates extensively trained in Sohar, Muscat and Brazil to be able to fully manage the advanced equipment without any complications.
The laboratory utilizes innovative designs with advanced automation and interface solutions including Laboratory Information Management System. These processes will help minimize and manage errors through the application of suitable corrective measures to ensure consistent quality pellets for steel customers in the region.
Mr Marcus Beluco COO stated that “This inauguration marks the culmination of over two years of intensive planning. The laboratory will seamlessly incorporate new testing and innovative processes to the palletizing and steel industries, contributing to the development of quality assurance and customer service.”
He added that “The laboratory will also allow the achievement of optimum sample flow by managing process changes in a more advanced manner while maintaining ISO standards.”
Spread over two floors, the laboratory consists of physical, chemical and metallurgical sections each designed to test specific characteristics of the pellets. In addition, the new facility is equipped with spectrometers, specialized furnaces, a waste water treatment system and gas detectors.
The laboratory is managed by a team of experienced professionals including young Omani graduates extensively trained in Sohar, Muscat and Brazil to be able to fully manage the advanced equipment without any complications.
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