Until recently, oil was busy wrecking the business cycle. But, in the last few weeks, it has come off fast and is in the process of lifting economic activity. Where do we go from here? My own view is that it will hang on the Fed. Oil is not in sufficient deficit to drive the
As reported yesterday, Australia posted a record trade surplus of $17.7 billion in June, with exports rising by 5.1% to $61.5 billion. This increase in exports was driven by surging LNG and coal exports, which both hit record highs over 2021-22: On the back of soaring prices owing to the Russia-Ukraine war: Resources Minister Madeleine
The ferrous complex was smashed on August 4, 2022: Late July CISA output was out too and as expected we are free falling into the pit. There was some solace in inventories also falling 13%: GLJ Research points out the obvious: THE GLOBAL SEABORNE IRON ORE MARKET IS NOW IN SURPLUS: When looking at the
Goldman Sachs was the great commodity cheerleader of this cycle. It has gone quiet of late perhaps because it has a lot of angry clients. Certainly, the recent data suggest a reversal of the great commodity super cycle trade that has unwound so spectacularly in the past few months. RBC has more: While major commodity
The ferrous complex broke on August 3, 2022: The dream is over. We’re just waiting for the market to wake up: China’s steel industry is entering a precarious new era as a worsening property crisis imperils demand and Beijing’s construction-led growth model looks increasingly untenable. Almost a third of China’s steel mills could go into
The Reserve Bank of Australia’s (RBA) index of commodity prices dived 8.5% in June in SDR (currency-weighted) terms, which follows June’s 2.8% drop: Over the July quarter commodity prices fell 13.8% over the quarter but were 14.1% higher year-on-year in SDR terms. As explained by the RBA: The rural, non-rural and base metals sub-indices all
The ferrous complex flamed out on August 1, 2022: For damn good reason. Check out the latest Chinese steel PMI: Judging from the steel industry PMI surveyed and released by the China Federation of Steel and Logistics Professional Committee, July 2022 is 33.0%, down 3.2 percentage points from the previous month, and the operation of
The ferrous complex was mixed on July 29: Once again, a mad night bid drove the price action in Dalian futures. I contend that this is Wall St speculators. There is not much reason to buy so furiously on the ground. MySteel indexes continue the roughly sideways pattern for demand and crash for supply: Iron
On occasion, one can’t help wondering what drives Davos Man. It sure isn’t loyalty to one’s nation or fellow man. Greed is the thing. There is no better example of this than RIO’s announcement yesterday that it has set the date for iron ore Judgement Day: Rio Tinto said on Thursday that its Guinea subsidiary
The Australian Bureau of Statistics (ABS) has released its International Trade Price Indexes for the June quarter of 2022, which revealed that export prices soared by 10.1% over the quarter and by 38.7% through the year. By contrast, the import price index rose by 4.3% this quarter and were 22.1% higher through the year. Surging
Ferrous markets were strong on July 26, 2022: It’s all a bit silly now. Steel is up 2% and iron ore 18% since the Chinese realty bailout fund news. This will only intensify the steel crisis in China and kill the rally in short order. Goldman has some ironies: The crisis engulfing China’s property sector
The ferrous complex was mixed on It was a genuinely stupid bounce in iron ore futures from a market that really has dragged its anchor in terms of fundamental analysis over the last two years as Dalian night trading has become the dominant price-setter. I suspect it is Wall Street loons that are to blame.
The ferrous complex was strong on Friday 22nd of July: Dalian futures went berserk on Friday night for this: A State Council meeting chaired by Premier Li Keqiang Thursday called on local governments to ensure construction and supply chains won’t be interrupted and that more job opportunities be provided to migrant workers, state broadcaster CCTV
The ferrous complex was weak on July 21, 2022: Some words from China’s largest steel mill are pointed: The world’s top steelmaker has added its voice to the growing sense of alarm among China’s mills over crisis conditions in the industry due to poor demand and plunging profits. China Baowu Steel Group warned of headwinds due to
It’s all over for 5.5% growth: China will keep its economic policy vigorous, targeted, reasonable and appropriate and will not introduce super stimulus measures and monetary easing to achieve “excessively higher” growth target, said Chinese Premier Li Keqiang on Wednesday. The country will maintain consistence of the macro economic policy and continue to help market
The ferrous market was mostly weak on July 19, 2022: No spot price available today. CISA early July steel output numbers were out a few days ago and showed further deterioration: I expect a repeat of last year’s weak trend in H2 as Chinese property starts keep falling. More evidence can be found in excavators:
We’ve seen it before. In 1990, in Japan, the end of its property catch-up development phase was the end of its growth phase: Now it is coming to China and the implications are the same. Jeffries: Although real money supply has begun to pick up, the money velocity of sectors connected to the real estate
The ferrous complex was firm on July 18, 2022: I have no faith in this rally at all. Lower ahead. In news, there is this: China is planning a state-backed iron ore company to oversee everything from massive mine investments in West Africa to buying the steelmaking material from global suppliers, according to people familiar
The ferrous complex is warming into n historic crash now: Futures managed an overnight rebound but make no mistake this is not over by a long distance. The key chart is the ongoing collapse in property floor area starts with the projection from current sales: The ongoing attempt to offset this with infrastructure is failing
Over the weekend, there was some price relief in the NEM as the weather turned more friendly for renewables: Needless to say, this will be very short-term. Not least because the bizarre world of Australian energy rolls on with the mass idiocy of energy discussion still paramount. Energy powers that be that set the course
So predictable. All commodity cycles work this way: Rio in effect conceded on Friday that the cost of exporting iron ore from Western Australia this year would be about 5 per cent higher than previously expected. The rising cost was implied when Rio retained its promise to keep unit costs between $US19.50 and $US21 per
The ferrous complex was annihilated on July 14, 2022: The steel crash is leading us lower. Here is September Shanghai rebar: The Chinese property crash is intensifying as it sweeps toward banks. Steel demand is directly in its path. As the broader commodity mania implodes under Fed pressure, the bulk commodities are freed to fall
The ferrous complex was weak on July 16, 2022: I see no reason for the price to stop falling. Steel inventories are still far too high: Plus: Chinese property is buggered for the remainder of 2022. Infrastructure is nowhere near enough to offset it. A global trade shock is building. The Fed is not going
It’s been caught long into the bust, you see, and needs a bag holder. JPM started it last week: “We still hold a base case view that a recession will be avoided and a stimulus-fueled recovery in China’s outsized demand in the coming months could tighten base metals markets and stabilize prices. However, with Chinese
The ferrous complex was weak on July 8, 2022: There is nothing good going on in Chinese steel: China’s steel mills are sounding the alarm over crisis conditions in the industry as margins plunge due to weak demand. The starkest warning yet has come from Hunan Valin Iron & Steel Group, which met this week
