Via the Office of the Chief Economist: In the June 2020 Resources and Energy Quarterly (REQ) we pointed out that “unlike downturns in previous decades, this downturn was not due to the bursting of excesses built up in the financial system…or in equity markets…. It also differs from the 1970s recessions…which helped contribute to stagflation and
Iron ore prices for September 25, 2020: Spot firmed. Paper too. Still waiting for steel to update. I’m still looking for a downside into $100 range ahead. There are plenty of softening signals: But I still reckon that this correction is largely seasonal in nature. The CCP has no choice but to keep building while
Iron ore prices for September 24, 2020: Spot up. Paper down. Empty apartment sales are still fine: World Steel released its latest: World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 156.2 million tonnes (Mt) in August 2020, a 0.6% increase compared to August 2019. Due to the ongoing difficulties presented by
Iron ore prices for September 23, 2020: Spot down again with more to go. Paper too. Steel has not updated. Steel output remains crazy into mid-September, via CISA: Indeed, steel inventories are huge for this time of year: I remain relatively comfortable with this given steel mills are policy operations at this point. That said,
Via The Fake Left: The draft reads: “Labor supports the responsible development of Australia’s gas reserves, subject to environmental approvals to ensure communities’ concerns are addressed through rigorous science-based processes, including gas from coal seams, shale and tight gas formations.” It says a future Labor government would ensure “gas development is environmentally sustainable, science-based and
Iron ore prices for September 22, 2020: Empty apartment sales have softened: China is struggling big time to lift the consumer as they save their butts off: Which leads only to the conclusion that MOAR empty apartments and MOAR bridges to nowhere are coming. Brazil is slowly doing better with the virus: I still see
Iron ore prices for September 21, 2020: Empty apartment sales are still fine: Not much more to add today except to say that I expect materially more correction yet. $110 at least. $100 is quite possible without breaking seasonal normality. Then the new year rally and peaks for this cycle mid-2021.
Iron ore prices for September 18, 2020: Everything up. CISA early September production easing as it usually does, from amazing levels. I’m still looking for a larger seasonal drawdown of the entire ferrous complex in the weeks ahead. Empty apartment sales are still fine: Vale is still getting buffeted by criticism, via Reuters: Vale SA
I have absolutely no idea why manufacturing is on board with the new Morrison gas policy. All it wants is cheaper gas and power. Morrison will give it neither. Here it is: Gas will help re‑establish a strong economy as part of the Government’s JobMaker plan, making energy affordable for families and businesses and supporting
Via the AFR comes a job well done: Adani Mining chief executive David Boshoff has a clear message for the environmental activists and naysayers who have spent the past decade rallying against the $2 billion Carmichael coal mine in Central Queensland – “it’s happening”. Standing on the edge of the first pit being dug at
Iron ore prices for 17 September, 2020: Lot’s of media panic about the peak is in blah, blah, blah. This is classic seasonality: BTFD. China has the credit pedal to the metal and given what will be a shite global recovery will have to leave there in 2021: And there’s lots more restocking of ore
Via UNHCR today: Extractive industries 15. In January 2019, 270 people died when Vale’s Córrego do Feijão tailing dam in Brumadinho collapsed.13 Most of those killed were Vale workers having lunch in the cafeteria located directly below the tailings dam. The force of the toxic mud dismembered bodies, and shattered what was a bucolic community.
Iron ore prices for September 16, 2020: Seasonal weakness is upon us. We could easily fall to $100 over the next month or so. BTFD for a new year bounce if it fits your horizons. Chinese empty apartments are fine: There’s more where that came from as China drives into a new credit cycle: But
Iron ore prices for Septemeber 15, 2020: Baseline is last week’s prices. Overnight futures copped it. Spot prices remain strong: Steel is holding up: Yesterday’s China data cleared up any mystery about why prices are high with crazy steel output: As well, mills have a long way to restock iron ore inventory: This restock has
By Michael Every of Rabobank Today is like one of those rare occasions when the Broadway understudy for a leading role finds out that the star has the ‘flu (not Covid-19) and so they get to go in front of the audience for once. Yes, Europe, today is your time to shine: “Everything’s coming up
Iron ore prices for September 9, 2020: Chinese empty apartment sales have softened: Brazil is beating the virus: Down into Q3 seasonals ahead. Up into new year. Peak H1, 2021.
Via UBS: Will the restart of blast furnaces ex-China impact iron ore demand in 2H h/h? No. Over the last month a number of steel producers have restarted BFs which were hot-idled due to COVID-19. We estimate in total ~22 BFs are being restarted around the world or ~30% of the total idled. In our
Iron ore prices for September 8, 2020: Empty apartment sales are still OK: Plenty more useless building coming too: I still expect a significant near-term price correction on seasonals. A bid into New Year and mid-2021 peak into long falls.
Iron ore prices for September 7, 2020: Spot still strong. Paper too. China imported 100.4mt of iron ore in August: I still think we’re roughly at peak imports. Steel exports were buggered, as you’d expect: Empty apartment sales are softening: To wit: China Evergrande Group kicked off a nationwide sales promotion with its deepest ever
Iron ore prices for September 4, 2020: CISA steel output remains outrageous: The key driver, empty apartment sales, remain strong: And it’s not just sales, it’s inventory, at SCMP: China’s biggest developer are likely to step up price discounting this year to clear a growing pile of unsold homes, with authorities sounding another alarm in their
Via AFR comes an article titled China’s African iron ore adventure will be filler, not killer: China’s ambition to build an alternative iron ore industry in Africa will push down iron ore prices by a maximum of $US8 ($11) per tonne, hosing down suggestions it will be a “killer” for Australia’s biggest export industry. …SMB-Winning
Via SCMP: Iron ore miners‘ and steel producers’ increasing use of the Chinese yuan will increase its internationalisation, reduce China’s vulnerability to any possible US financial sanctions, and help the domestic economy in line with the new “dual circulation” strategy. By using the yuan rather than the US dollar to price iron ore, this will
Daily iron ore price update for Sep 3, 2020: New highs and my $130 target reached. But not for long given futures pricing overnight. Chinese empty apartments still strong (and they’re back at the movies): No change to my outlook. Seasonal weakness ahead. Higher into New Year. Top in April or June as Vale brings
Iron ore prices for September 3, 2020: Empty apartments still strong: Brazil virus: Still see prices firm for a bit, then seasonally weak, then up again into year-end. Topping around April.
Iron ore prices for September 1, 2020: Still strong pricing action. Chinese empty apartments likewise: And Brazilian virus: Brazil released export numbers yesterday and they were OK but nothing great: Volumes are nearly restored to pre-COVID levels so that is some risk out of the market. But it remains to be seen if volumes can
Iron ore prices for August 31, 2020: Prices are still strong but the China steel PMI is fading, down 47 headline and 45.6 new orders: New exports orders are disastrous at 35. There were flood disruptions. But overall, we are back at levels I would normally associate with price deflation. Property sales still look fine:
Iron ore prices for August 29, 2020: Spot and paper up as DXY pukes on Fed. Chinese empty apartment sales are still strong: Plenny of virus in Brazil: Still bullish unless or until Vale brings the volumes.
The market will respond. With the Australian Government’s protected gas cartel driving power prices mad from 2015 guess what? At Bloomie: Australians’ fervent embrace of rooftop solar is forcing the grid to become more flexible. The shift has carved out daytime demand for traditional generation and caused bigger fluctuations in electricity use across the day,
I’ve been arguing this week that both Twiggy Forrest and Gina Rinehart would be wise to consider a float of their respective iron ore businesses in the near future. The reason is straightforward. The iron ore trade is at a cyclical high just as Chinese global relations are undergoing a structural deterioration as Beijing launches
Iron ore prices for August 26, 2020: Spot up. Paper up more. Steel has not updated. Chinese daily empty apartment sales are still fine: Brazil is still sick: And there is much more Chinese restocking to do. That said, my earlier worries about rebounding Vale volume are resurfacing, via Bloomie: By at least one measure,
