Via Straits Times: Footage of Evergrande’s management being held hostage in company offices by anxious retail investors made the rounds on China’s social media earlier this week. “I have with me Nanchang’s top Evergrande representative surnamed Chen,” said WeChat user Yang Qiwen, referring to the city in Jiangxi province in south-eastern China. The posting included
Thermal coal and LNG futures both came off overnight. The former: The latter: Oil was still strong as we await the return of hurricane shuttered US production: Beijing continues its campaign to reduce power output. After steel cuts, which have curtailed a lot of EAF production, next is cement: Several Chinese regions have imposed restrictions
And here they come. UBS on FMG: Downgrade to Sell: iron ore fundamentals deteriorating faster than expected We downgrade FMG to Sell (from Neutral), cutting our target to A$15/sh (from A$18/sh). Since peaking in July, the stock is down 34% while the iron ore price has more than halved. At spot (~$113/t) FMG still generates
Evergrande. Remember the name. Australian historians will. Yesterday it broke the Chinese property sector as its bonds were suspended: In order to ensure fair information disclosure and protect the interests of investors, after the company’s application, all existing corporate bonds of Evergrande Real Estate will be suspended for one trading day from the opening of the
The ferrous complex was in free fall on September 16, 2021 as spot and paper collapsed. Steel has not updated: Yes, we will likely be at $100 tomorrow. I was not bearish enough. There is no end is sight. CISA early September steel output data kept on falling: And the Chinese property developer shakeout is
A quick note on a few FMG points as iron ore continues to fall. Dalian today: First, what a horrible chart FMG has with an immense double top: How far FMG corrects obviously depends upon the iron ore price. My best guess is we’re going back to $60 over the next six months, with a
The globe is being gripped by a mounting energy crisis. It is being sold by Wall Street as the fruits of decarbonisation and ESG policies, to pump up a bubble. But it appears more a combination of temporary factors for both demand and supply that will take time to resolve but is not structural. The
The ferrous complex was very weak again yesterday as China’s construction hard landing became obvious. Spot tumbled and paper fell more overnight. Steel has not updated: Worse is still ahead. $100 this year and $60 next with all the risk being to downside for earlier. Some folks don’t get it. Jevons Global at Livewire: Trite
A few weeks ago in Liyang Star City, Kunming City, China, we saw this: The blasting involved 15 high-rise residential buildings in the second phase of Liyang Star City, Kunming City, China. The project was unfinished due to a break in the developer’s capital chain. At the end of last year, the local government restarted
The ferrous complex was weak again on September 14, 2021 as spot fell, paper fell further overnight and steel is looking toppy worldwide: The PBoC tightened futures limits again and Evergrande is going bust. Enough said. Perhaps more importantly, the China property developer bust is transpiring just as the global post-COVID steel boom tops out.
Evergrande is going bust and nobody knows what that means. Here is its HK regulatory filing that reads like an obituary: Beijing has also retained bankruptcy specialists. The unhappy investors who were happy to take huge yields but not the risk that comes with it stormed Evergrande head office: “Evergrande return our money!” pic.twitter.com/F6zbJu21jF —
It’s been a wild few months for coal. We’ve gone from wallowing prices to record highs in the blink of an eye. But there are signs it’s coming to an end. Coking coal has been the craziest. As Chinese steel output has collapsed, coking coal has gone through the roof. This was always pretty stupid.
Clearly, Goldman Sachs is still too long commodities: Growing scarcity across physical markets. Since last October, policymaker and investor focus has remained on the vaccine-driven demand recovery from the deepest recession on record. Yet today, physical goods demand has reached such high levels — above pre-pandemic trends in all but oil — that the system
The ferrous complex was mixed again on September 13, 2021 as spot fell sharply, paper held on and steel bounced hard: There were more rumours of production cuts in steel mills for the rest of this year. I expect these cuts to be permanent. Or, at least until the panic sets in over growth. Below
The ferrous complex was mixed on September 10, 2021 as spot fell, paper was flat but steel lifted: Chinese iron ore inventories are rising again, hitting 131mt last week: That China has rising iron ore inventories amid crashing prices tells us all we need to know about the slackness in the market. The cartel knows
The soft bailout of Evergrande has begun: Regulators in Beijing have signed off on a China Evergrande Group proposal to renegotiate payment deadlines with banks and other creditors, paving the way for a temporary reprieve as the cash-strapped developer struggles to come to grips with more than $300 billion of liabilities. China’s Financial Stability and
The ferrous complex crashed again on September 6, 2021 as spot fell off a cliff, paper has some catching up to do and steel did not update: CISA steel output data for late August was smashed to a new low: Though at least inventories fell 10% so demand was better. However, iron ore supply is
Morgan Stanley with the note: 2021 has been a harder year for many investors than the headline indices imply. It’s been a year where ‘ESG’ and ‘Quant’ remain key structural trends in the investment community. And it’s been a year that has seen an almost constant, running debate over the outlook for growth and inflation. Commodities,
The ferrous complex was mixed on Friday 3rd of September 2021: In news, China wants more ore: China’s iron ore producers aim to increase domestic iron ore concentrate output by more than 100 million tonnes between 2021 and 2025, an official with the country’s steel industry association said on Saturday. Luo Tiejun, the vice-chairman of
The CBA has opted for the glass-half-full approach to steel and iron ore: “For iron ore prices to find meaningful support again, we would need to see policy on China’s steel output cuts relaxed,” he says. “That’s not as unlikely as it seems, especially if steel prices lift notably. We think that’s completely plausible given
The ferrous complex was weak again on September 2, 2021 as spot fell more and paper held on: There is now an iron ore glut. It is everywhere you look. FMG grade discounts are blowing out: As iron ore prices have fallen from record highs, Fortescue Metals Group (ASX:FMG) has seen the return of significant
The ferrous complex was smashed on September 1, 2021 as spot cratered, paper held and steel tumbled: News was all about more output cuts: Production restrictions in various regions have continued to advance, and there are signs of increasing efforts. Due to the strengthening of dual control of energy consumption, the Guangxi region has imposed
The national accounts for the June quarter revealed that Australia’s terms-of-trade (ToT) hit its highest ever level, surpassing the September 2011 peak: That is likely to the be as high as the ToT gets, however, with the RBA’s commodity price index for August registering a 6.0% decline in SDR terms after hitting a record high
If there are two words in the English language that I enjoy writing they are “limit” and “down”. That’s iron ore today: And the Caixin PMI: China hard landing here we come.
The ferrous complex was smashed on August 31, 2021 as Chinese data tanked. Just as importantly the market took it at face value rather than seeing it as good news auguring more stimulus. Spot was hit and paper collapsed limit down: There’s not much more to add. I remain of the view that we are
The ferrous complex was mixed on August 30, 2021 as spot and paper fell but steel lifted (though that’s a week of price gains): In news, Andrew Forrest puts the boot into the bears by declaring he “wouldn’t bet against the iron ore price”. I’ll take that bet. Nothing has changed from last week when
The ferrous complex continued its huge counter-trend rally on August 27, 2021 as spot jumped and paper launched: This is still classic bear market action. Iron ore jumped with every other commodity on the something for everyone Powell speech. However, I still expect real steel demand to keep on falling ahead as Chinese construction slows
Stay short iron ore. Why? Nomura explains: Executive summary Beijing’s recent regulatory blitz on several sectors, including off-campus tutoring and internet platforms, has garnered investor attention. However, markets may have become so focused on the regulatory storm that they ignore the elephant in the room: Beijing’scurbs on the property sector, which makes up one-quarter of
The ferrous complex was mixed on May 26, 2021 as spot lifted but paper fell. Still waiting for steel: In news, the Baltic Dry is singing about booming supply: Momentum has been building in the spot market for capesize bulkers for the past week and on Monday it finally happened — average day rates crossed
The ferrous complex was firm again on August 25, 2021 as spot and paper lifted. Steel has not updated: CISA data for mid-August is out and gave us a decent rebound though still down year on year: This is to be expected emerging from seasonal weakness. However, I expect output volumes to remain materially below
