Daily iron ore price update (Li Keqiang backfires)

The ferrous complex bifurcated violently yesterday as Chinese premier Li Keqiang stuck his foot in his mouth. Spot iron was firm. Paper soared overnight. But steel was caned: The driver was the release of this tidbit: “Overall economy and operation of enterprises have continued to recover, but surging international commodity prices have brought great pressure


Peak coal points way for peak oil

TS Lombard with sounds analysis: Until not that long ago, the idea was still taken seriously that peak oil would be supply-side driven and triggered by sky-high prices: but as it is now clear that the oil case will resemble all previous energy transitions, useful lessons may be had from the most recent such precedent–peak


The only way is DOWN for commodity prices

I do enjoy a good stink with a commodity supercycle fanboi. Today’s example is Tom Stevenson at Fidelity International who writes under the title “the only way is up for commodity prices” that: Inflation is everywhere and always a fiscal phenomenon. The Biden administration has embarked on a war against inequality and this will be


Commodity super-cycle hype: Copper edition

Over the last few months, there has been an increase in analysts calling a commodity super-cycle. I disagree. Many commodity prices are at super-cycle levels. It is the volumes that are not in a super-cycle.  And high prices without an increase in volumes is a sure recipe for price reversion. Or, in other words, a cycle. Not


China singles out real estate for slowing

Over the holiday period, the FT had another confirmation piece of the MB view that China is set to slow, particularly in the most commodity-intensive sector of real estate: PBOC has instructed banks to cut credit availability. Macquarie says concerns about virus-impacted growth are gone and structural reform has resumed. Chinese real estate sales surged


Iron ore drives big reduction in budget deficit

By Gareth Aird, head of Australian economics at CBA: Key Points: The Australian Government Budget has improved significantly since the 2020/21 Mid-Year Economic and Fiscal Outlook(MYEFO -published 17 December 2020). Our point estimate for the revised underlying cash deficit in 2020/21 is $A145bn (unchanged policy basis). Changes to economic parameters and a better starting point


Is the Australian dollar a copper currency?

Sometimes correlation is not causation. Take this from Citi: USD strength Last week’s major themes in spot FX include:·USD strengthened broadly (0.9% in broad NEER terms; BBDXY up 0.7%; EURUSD down 0.9%) against major currencies as rising concerns around third Covid wave paused the reopening optimism and led to risk reduction across markets, although the


Aussie coal outlook

Dim Ariyasinghe at UBS with the note: Seaborne coal shipments -13% YTD, Newcastle volumes down on NCIG outage UBS Evidence Lab data suggests coal shipment volumes remain depressed into Q2 (Figure 1) with shipments down 13% YTD (as of 28-Mar). The fall in coal shipment volumes YTD is led by South Africa (-23% YTD due


Daily iron ore price update (steps down)

The ferrous complex fell on March 30, 2021 as iron ore spot and steel futures eased. Paper markets were up modestly overnight after the front-month contract rolled forward: The rising US dollar will become a headwind for iron ore soon. CBA is making sense: The surge in commodity prices over the last year has led


World’s richest woman warns of iron ore crash

Gina Rinehart’s right-hand man is on the hustings with a stark warning: Rinehart’s subsidiary Atlas Mining’s CEO Sanjiv Manchanda said iron ore will fall as supply normalises. He demanded cuts to payroll tax and compliance costs. He wants tax concessions to allow for iron ore beneficiation plant investment. Aside from the tax drivel, which is


China’s new five year plan is an iron ore calamity

For many years it has been obvious that the Chinese needed to change their growth model. They have had a little success in shifting away from wasteful commodity-centric investment and towards consumption but not enough. Every time they looked like accelerating the structural reforms they backtracked quick smart as growth slowed jeopardizing CCP legitimacy. But


Beijing warns Canberra it’s going to crash iron ore

The ferrous complex continued its recent deflation yesterday as the shock of Chinese environmental challenges and a higher US dollar hit the market. Spot was hit. Paper fell sharply though rebounded overnight. Steel was stable offering better margins and therefore ongoing raw material stocking. So the world is not yet falling apart here: So, we