Tianjin benchmark fell 40 cents to $63.85. Coking coal is getting the treatment. Steel is fading. Hard to know where we go from here. We’re entering a seasonally strong period for prices but the combined Fed tightening/emerging market crisis and Trump trade war is developing into a very serious headwind. China knows it, via Reuters:
Via the AFR: AGL Energy’s proposal to import LNG into Victoria is understood to be driving a push to force a restructuring of the utility or impose conditions around the plant’s operations amid worries it will only cement the company’s strong market position in the state suffering most from high gas prices. The debate around
Iron ore prices for June 20, 2018: Tianjin benchmark was unchanged at $64.25. Paper and steel held on. Normally we would see prices firming through July/August but as happened in H1, trade war fears disrupted seasonal price patterns, forcing it lower earlier then leaving it high later. The same is possible in H2 it seems.
The old adage in investment markets is when everyone is bearish, you should be bullish. Can that be said of cryptocurrencies? Recently, the Bank for International Settlements – the central bank’s central bank – came out with a damning report into the market for “alternative” currencies, pointing to the major flaws of scaleability and trustworthiness
Iron ore prices for June 19, 2018: Tianjin benchmark was hit $1.75 to $64.25. Everything was bashed though the damage is pretty limited so far. I expect it will get worse before it gets better. Trump looks determined and China cannot win. Trade wars are toxic for surplus nations.
The AFR is celebrating the new mining boom: A $2 billion acquisition spree by South32 and Gina Rinehart’s Hancock Prospecting has underscored the more upbeat outlook on commodity prices among industry heavyweights, with the scramble to buy or develop world class assets and infrastructure heating up as the world’s largest miners emerge from years of
There is no end to it. Via The Australian: Oil giant ExxonMobil is considering a Victorian LNG import plant to replace rapidly declining Bass Strait gasfields, in a move that could draw in BHP to help build a floating terminal at less than half the cost of rival east coast gas import plans by AGL
Iron ore prices for June 15, 2018: Prices have not updated today. Tianjin benchmark is at $66. I expect to see weakness when Dalian opens given the news flow on tariffs. In news, slow moving disputes herald more supply ahead. Samarco is plodding forward: After a year of back and forth, the owners of the idle
Man, this guy is bloody crooked, via The Australian: “My message to the retailers is unless they get prices down and they pick up their act, you will see more intervention because that is what the public will demand of their political leaders,” Mr Frydenberg told ABC Radio National. …Mr Frydenberg also lashed AGL specifically,
Iron ore prices for June 14, 2018: Tianjin benchmark was up 20 cents to $65. Paper was flat overnight. Steel is running. And is it any wonder with output like this: Inventories are reasonable so it has to be underlying demand. As I’ve noted recently with the big rebound in exports, I think OBOR-demand is
Via the IEA’s OMR: In this month’s OMR, we publish our first estimates for global oil demand and non-OPEC supply for 2019. Rapidly rising prices in recent months have raised doubts about the strength of demand growth, and we have modestly downgraded our estimate for 2018. Prices are unlikely to increase as sharply as they did
Iron ore price charts for June 13, 2018: Tianjin benchmark fell 15 cents to $65.80. Paper is running on the spot. Steel is strong again. Output for late-May at CISA mills pulled back to a slightly less astonishing 1.95mt per day. Iron ore spot appears to be decoupling with paper a little, not to mention
If you listened to the daily bleating of Australia’s parliamentary coal maniacs, you could be forgiven for concluding that the sector was on its last legs. Nothing could be further from the truth today as Australia is being flooded by coal cash at a rate that has not happened since the boom of 2008. The
Iron ore prices for June 12, 2018: Tianjin benchmark lifted 25 cents to $65.95. Paper was flat overnight. Steel is stalled. The Chinese stock draw down is slowing as noted yesterday: “As the low season for steel demand is approaching, price hikes at mainstream steel firms helped to stabilise market sentiment,” said analysts at Orient
Yes, somehow the farce has doubled in just a few days. Last week it was Twiggy Forrest importing gas to NSW. Now it’s AGL to Victoria: AGL Energy has struck several deals for its proposed liquefied natural gas import jetty at Crib Point in Victoria, which could help deliver more gas to Victoria and South
Iron ore prices for June 8, 2018: Tianjin benchmark lifted 60 cents to $65.70. Paper is flat. Steel is flat. Port stocks fell a bit to 161mt last week. Rebar draw downs are slowing at 5.03mt as output booms. It’s a sector still in rude health despite slowing Chinese output. I have two ideas for
Via UBS: What is Atlas Iron? AGO is predominately an iron ore producer. It has three operations in the north of the Pilbara and sold 14.4Mt (via Utah Point) in FY17 at a C1 cash cost of A$34.8/wmt FOB (cf. FMG c.US$11-12/wmt). With a reserve grade for its current operations at c.57% Fe, AGO has
Iron ore prices for June 7, 2018: Tianjin benchmark fell 5 cents to $65.15. Paper sank overnight. Steel is revving up to match huge output. Coking coal is still untouchable. Steel demand remains excellent. Iron ore is clearing oversupplied. Coking coal the opposite. The first must break first.
Iron ore prices for July 6, 2018: Tianjin benchmark lifted 45 cents to $65.20. Paper was flat overnight. Steel is still trying but under the deluge of output can’t rally. CISA mid-May output was still astonishing if lower at 1.97mt per day. Reuters reports that: Chinese iron ore futures climbed to their highest level in
Iron ore prices for June 5, 2018: Tianjin benchmark rose 90 cents to $64.75. Paper was up overnight. Steel is firm still. Rebar inventories fell to 5.32mt last week, still falling at a good clip despite record output but still up materially on last year. The driver of gains comes from Reuters: Tangshan, the
By Leith van Onselen Within today’s dump of balance of payments data that feeds into tomorrow’s March quarter national accounts release was the important news that Australia’s terms-of-trade has risen by 3.3% in seasonally adjusted terms and by 1.6% in trends terms: Over the year, the terms-of-trade fell by 2.6% in seasonally adjusted terms and
Via the ABC: Plans for the first liquified natural gas (LNG) terminal in New South Wales are being hailed as a “game changer” that will address the state’s energy supply issues. A consortium backed by billionaire Andrew Forrest and Japanese energy giants has announced Port Kembla, near Wollongong, as the preferred site for the LNG
By Leith van Onselen The RBA has released its commodity price index for May, which rose by 0.3% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – as well as by 0.6% in Australian dollar terms: Preliminary estimates for May indicate that the index increased by 0.3 per cent (on a
Iron ore prices for June 4, 2018: Tianjin benchmark fell 85 cents to $63.85. Paper was up overnight. Steel flamed out. We’re running on the spot here. Except for inventories. China’s port stocks climbed to an all-time high last week of 161.98mt. That tells you that despite rampaging steel output, it is still the hoarding
Andrew Forrest’s new east coast gas play is just another disastrous chapter in Australia’s gas monstrosity. Via AFR today: AIE is the sponsor of not one of but three separate plans to import LNG for sale into domestic gas markets. Forrest has involved himself though his privately owned energy play, Squadron Energy. He was introduced
Iron ore prices for June 1, 2018: Tianjin benchmark lifted 40 cents to $64.70. Paper was down overnight. Steel is warming up again. The steel PMI fell back to 50.6 but that is not enough to represent any kind of signal for such a volatile index. Coking coal is still strong and could drag the
Via the ABC: The Trump administration’s announcement it will impose tariffs on steel and aluminium imports from Europe, Mexico and Canada has drawn swift vows of retaliation from key allies, inflaming trade tensions and sending stock markets sinking. The administration’s move threatens to inflate prices for US consumers and companies and heighten uncertainty for businesses
Iron ore prices for May 31, 2018: Tianjin benchmark lifted 30 cents to $64.30. Paper lifted overnight. Coking coal is off to the races again. Steel prices are firm. CISA output for major mills reached an astonishing 2mt per day in mid-May. Literally off my chart. That this extraordinary output is transpiring in conjunction with
USB says so: A Green China is leading to a structural change to iron ore price discounts The environmental agenda in China, on the back of continued domestic growth, has had a material impact on the steel making industry in recent years. This is driving high productivity of steel mills, which will see margins remain
Iron ore prices for May 30, 2018: Tianjin benchmark eased up 74 cents to $64. Paper was up overnight. Steel is holding. One wonders if our mid-year price weakness is already over. We did have an unusually large draw down in April owing to trade war fears which boosted mills margins. Coking coal is still
