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
The ferrous complex was strong last week as Chinese steel prices soared on the back of the steel output cuts. This is the paradox of central planning aimed at lowering input prices. Less steel means higher prices and any lower need for iron ore is more than offset by a stronger impulse to restock raw
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 ferrous complex was mixed on April 8, 2021 as spot iron ore declined and paper markets rallied overnight. Steel has not updated: Nothing new today. I expect strong pricing for another month or so then a decent drawdown as seasonal weakness takes hold, plus a trend decline in the price deck through H2. Worse
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
With a new Biden administration barely cooling its heals in the White House, and distracted by domestic issues such as COVID, is Russia planning a little test of Biden’s strongly anti-Kremlin rhetoric in the near future? The UK Telegraph is musing on it: Russia is massing as many as 25k heavily armed and mechanised troops
The ferrous complex was mixed overnight as spot climbed and paper fell. Steel has not updated. Chinese steel output via CISA remains very strong for late March: With steel prices so high it will be very difficult to prevent mills from keeping steel output high. This is bullish for iron ore at the margin. Nonetheless,
Via the BOM comes a possible short terms spike in the iron ore price as two cyclones threaten to combine into a perfect storm: Two tropical cyclones are interacting to potentially create a superstorm. At this stage neither is forecast to make landfall in the Pilbara but heavy weather is forecast. Here’s the forecast path:
The ferrous complex blasted off on Tuesday 6, April as Chinese steel output restrictions backfire spectacularly in the form of skyrocketing prices. Iron ore spot and paper followed: Ah…those central planners. They never learn. As noted many times previously, when you mess with steel output to try to sink iron ore it nearly always goes
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
What is it about poor old West Pilbara iron ore that it rings the bell at the top every cycle? Almost without fail, whenever you hear this story revived, sell iron ore with both hands: Australian Premium Iron ore (the West Pilbara Iron Ore Project) aims to be exporting in two years. It will use
The Reserve Bank of Australia (RBA) released its Index of Commodity Prices for the month of March, which continued its strong bull run. Over the month of March, commodity prices rose another 1.6% in currency-weighted SDR terms, which followed the 3.1% rise in February. Over the March quarter, the commodity price index surged by 12.5%
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
The ferrous complex rose over Easter with spot, paper and steel all firm: In news, UBS has hit the market with an Easter hammer: “We expect the iron ore supply to lift in the second half of the 2021 financial year and demand to moderate, resulting in iron ore prices falling below $US100 per tonne
The ferrous complex fell on March 31, 2021 as steel production cuts took their toll. Spot iron ore was down, steel was down and paper was down: China’s steel PMI is still sitting in recent ranges However, production fell sharply, probably as Tangshan curbs limit output. Still, nothing to worry about here yet. In news,
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
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
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
It is not often that you get to name the pain of a nation. But that dubious privilege fell to me a few years ago when I christened the Simandou iron ore project the “Pilbara killer”. That killer is in the news at Nikkei: China has learned the lesson of Japan pre-WWII which suffered from
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
The ferrous complex lifted aggressively yesterday as green restrictions on steel output rocket prices higher. Iron ore had a better day but China aims for it to be the charred remain left behind. Will it succeed? Morgan Stanley tackles the question: Summary view: China’s steel production cuts are positive for global steel prices, but will
Longer-term readers of MB will recall that we fought a long battle with the idiot optimists in what used to be called the Bureau Resources and Energy Economics (BREE). Eventually, we so salted the earth around the failed forecaster that it was disbanded and its primary output shifted to the Office of the Chief Economist
The ferrous complex was strong Friday. Spot iron ore lifted. Steel had a very strong week. Iron ore paper surged Friday night: In news, it’s all about greening: China’s iron ore supply is expected to be abundant, as demand will decline with Beijing’s steel output cut while supply may incline among the overseas miners, Wang
I am still long oil on the basis that demand is going to rocket through H2, OPEC keeps the supply brakes on supply and hence US shale requires a sharper signal to bring back the rigs. That has started but should have further to run. Today, JPM looks at what happens if the ship currently
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
The ferrous complex lifted slightly on March 25, 2020. Spot firmed with paper. Thought the latter pulled back overnight. Steel has not updated. CISA output for mid-March continued to pull back sharply though it remains insane. Perhaps on anti-pollution measures: In news, Vale has a few problems: Two civic organizations have asked iron ore miner
The iron ore price complex was mixed on March 24, 2021 with spot prices down but paper prices jumping overnight. Steel has not updated: I think we have our answer here in terms of whether or not environmental restrictions will crash iron ore prices in the short term and it is “no”. The thing is,
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
The ferrous complex dead cat bounced on March 23, 2021 as spot jumped but paper fell away again. Steel has not updated: Perhaps the worst argument I have ever seen is going to save iron ore, at the AFR: “This is the start of the boom, not the end,” said Tribeca Global Natural Resources portfolio
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
