Via the AFR: Policy changes flagged by politicians and government departments in Vietnam, Indonesia and Bangladesh, and a full moratorium on new coal plants in the Philippines, may result in just 25 gigawatts (GW) of new coal-power projects getting built this year. That is an 80 per cent reduction from the 125GW planned five years ago,
Via SCMP: Brazilian port operator Grao Para Multimodal’s executive director, Paulo Salvador, knows there is plenty of untapped high-grade iron ore in northern Brazil, but a mix of bureaucracy and limited capital have stymied efforts to begin production for years. Across the states of Para, Piaui and Tocantins, there are at least three mines amounting
Via Goldman: 1) OPEC and Georgia help neutralize near-term risks. The events of last week substantially reduced the downside risks to our bullish commodity narrative — a fact reflected in the rise in oil and copper alongside the sharp decline in gold. First, Saudi Arabia agreed to a unilateral production cut that neutralized current lockdown
Via Argus: Strong consumer demand, lower-than-expected temperatures across northeast Asia and a severe shortage of prompt LNG supplies and spot tanker availability have combined to send northeast Asian spot LNG prices to an all-time high — just nine months after hitting record lows. The front half-month ANEA price surged to $21.785/mn Btu for first-half February
The RBA has released its commodity price index for December, which surged 8.6% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – to be 11.7% higher over the year: Preliminary estimates for December indicate that the index increased by 8.6 per cent (on a monthly average basis) in SDR terms, after
Iron ore prices for December 18, 2020: Spot to the moon with more to come. Paper is wild. The steel market is now being forced to absorb the inflation which is even more bullish. $200 ahead is still quite realistic.
The local CCP apologists always see Bejing “playing the long game”, even when all it is doing is following the blundering dictates of an angry tyrant. The Times: China is suffering mass power cuts in the south, prompting cities to dim street lights, suspend factory production and tell office blocks to turn off heating unless
Iron ore prices for December 17, 2020: Spot is going to new highs today after paper blasted off last night. Steel is still rising so some inflation is being passed on. There is no near term end to this: Chinese demand is excellent; Chinese inventories are short; ex-China demand is recovering; DXY is getting hammered;
That’s the question that has plagued me for ten years. Via James White of Lessep Investment Management, at the AFR: If China’s annual residential property sold was built in Eureka Towers (14,000 of them) and one constructed every 65 metres, it would line the Hume Highway from Sydney to Melbourne. In terms of population, 14,000
Via Goldman: Growth to feel the weight of policy normalization in 2021While the near-term growth picture looks encouraging, tightening is clearly the direction of travel when it comes to policy. To be clear, we expect stable policy rates and no hikes in OMO or MLF rates next year. This is because interest rates have mostly
Iron ore prices for December 16, 2020: Spot up. Paper eased overnight. Steel went pop after China’s impressive data dump. No change for me. Higher yet into Q2 next year.
Iron ore prices for December 15, 2020: Spot up. Dalian paper up to a new record high. Steel is stuck. Port inventories have started to fall as Chinese mills desperately seek to fend off prices. If it continues, this will only prolong their pain, but it does weigh on prices at the margin. Yet not
Iron ore prices for December 14, 2020: Spot flamed out. Paper too. Steel has not updated. Yesterday’s outburst in Beijing about unfair trade practices managed a little correction. But, fear not, such tantrums are typical for this time in the cycle. Beijing and CISA have been spitting the dummy during price spikes like this for
A sensible suggestion from Matt Canavan: We should apply a levy on exports of iron ore to China. The funds raised can be used to compensate the Australian industries harmed by China’s actions. Our exports of iron ore to China amount to $85bn a year. So even just a 1 per cent levy would raise
Iron ore prices for December 11, 2020: Spot up again. Paper as well. Steel has not updated. Records are tumbling. As iron ore roars higher: It is only $7 below its all-time AUD high: As Dalain futures hit their all-time high: China is not happy, whinging like a stuck pig: China’s steel industry body has
Iron ore prices for 10 December 2020: The news flow is relentlessly bullish. La Nina fears are realised, at Reuters: Pilbara Ports Authority said on Thursday it has started to clear large vessels out of Port Hedland, the world’s biggest iron ore export hub, as it issued a cyclone warning. A tropical low located some
Iron ore prices for December 9, 2020: Spot goes up no matter what. Paper is on fire again. Steel is stuck and margins are collapsing. Never underestimate the iron ore market’s ability to move far and fast. Few markets are so pure in terms of price responsiveness to supply and demand shifts. Right now we
Iron ore prices for December 8, 2020: Spot at new highs. Paper flamed out. Steel ahs not updated. Some explanation of recent price strength from Robert Rennie: Our bulk shipping activity models point to surprisingly weak November iron ore exports at 70mt, down from 76mt in October. Given the strength of Chinese iron ore imports
Iron ore prices for December 7, 2020: Spot booming. Paper too. Steel stalled with margins for mills getting crushed. Brazilian November exports fell to 31mt: I don’t know what Vale is doing. It’s supposed to be increasing volumes. Chinese imports were down in November too: Still bullish on prices for the next six months.
Via Bloomie comes ABARES outlook for 2020/21: The value of its agriculture production is forecast to gain 7% in 2020-21, an upward revision from the September estimate of no change. This is supported by a winter crop that’s on track for its second-largest harvest, a promising rainfall outlook and elevated livestock prices. Value of agriculture
The world moves in mysterious ways. Here we are amid a global pandemic and extraordinary China divorce and what do we get? Mining Boom 3.0. A few weeks ago Variant Perception put out a note declaring another commodities supercycle imminent. Let’s reprise: A new dawn for commodities Executive Summary • We are on the cusp
Take that Beijing! Iron ore prices for December 5, 2020: Spot to the moon. Paper rolled forward. Steel is not keeping pace and output is steadily diminishing as the year winds down. Steel inventories have been easing and port stocks have stopped climbing but neither of those explain this. Supply may not be abundant but
Iron ore prices for December 3, 2020: The red hot rally continued overnight. Steel is not going with it which is a standing warning. Another is this little snippet from Reuters: Brazil’s Vale trimmed its 2020 output guidance to 300 million to 305 million tonnes, from a previous target of at least 310 million tonnes.
Via the ABS: Key statistics The seasonally adjusted balance on goods and services surplus increased $1,641m to $7,456m in October. Exports of goods and services rose $1,819m (5%) to $35,720m. Imports of goods and services rose $178m (1%) to $28,264m. Main features Key figures, Seasonally adjusted Aug-20 ($m) Sep-20 ($m) Oct-20 ($m) Change Sep-20 – Oct-20 ($m) Change Sep-20 –
This idea has been around for a while but perhaps its time has come. From The Glass Pyramid: Over the last few weeks the airwaves have been buzzing about the falling national income (and the problems for Mr Hockey’s budget) due to the rapid decline in the price of iron ore and Twiggy Forrest’s calls for restraint
Iron ore prices for December 2, 2020: Spot out of control now. Anything is possible when this kind of hoarding cycle happens. The Chinese iron ore inventory build has paused at 130mt. The ongoing hoarding is the number one support to prices over the next six months, adding some 80mt per annum to apparent demand:
Iron ore prices for December 1, 2020: How high are we going here? Supply should be flowing from Brazil yet here we are rising again to new highs. Chinese steel and iron ore inventories have stopped rising as well so we are pushing out the timetable for the end of the restock. It’s the norm
Iron ore prices for November 30, 2020: Spot up. Paper down. The steel PMI has firmed though remains remarkably weak given steel ouput: No change from me. Strong pricing through Q1, 2021 then down.
Iron ore prices for November 27, 2020: Spot hit a six-year high. Paper is lagging. Steel has not updated. Empties have stabilised again: I wouldn’t expect us to get much higher but it’s quite possible. Especially if we see some Q1 supply disruptions with La Nina. No change from me. Strong pricing through Q1 then
Via Jeffries: In this report, we evaluate copper demand under three different scenarios. In each scenario, we assume global GDP growth of 2% per year after 2021. The key difference in each scenario is our assumed rate of growth of renewable power capacity. We also assume that investment in electric networks aside from power plants
