From RIO’s freshly minted Dec QTR production report: Iron ore shipments and bauxite production guidance remain subject to weather and market conditions. Our guidance assumes development of the pandemic does not lead to government-imposed restrictions and widespread protracted cases related to new highly contagious variants with high severity, which could result in a significant number
The ferrous complex fell further on January 17: Chinese data delivered pretty much what I expected. Property starts are in free fall, down 31% in December and at their deepest falls ever on year-on-year in the quarter: There is some offset in infrastructure coming. Pantheon: As with exports, the pivot toward consumption will likely fade
The Australia Institute has a new report out that should be the headline around the country but barely gets a mention: Australia’s giant offshore gasfields are paying almost no royalties, create few jobs and are a large and rising source of greenhouse gases, according to a new report from the Australia Institute. The “Gas-fired robbery”
The ferrous complex flamed out on January 14, 2022 as everything fell: It looks like the pre-Olympics restock is sputtering and a slew of bad data landed on the market as well. CISA output for the first 10 days of January fell back sharply and is down roughly 10% year-on-year. Inventories climbed sharply which is
The ferrous complex flamed out on January 13, 2022 as Chinese property hit the kids: Is that it? Who knows! What we can observe is that the recent bullish hysteria will have nicely bloated the holdings of speculators and steel mills even as the demand outlook doesn’t improve at all and we head into both
The ferrous complex has joined the commodity crazy town engulfing global markets. Everything was up on January 12, 2022: Commodity crazy town is here: A falling US dollar based despite Fed tightening. Strong US inflation. Chinese stimmies and OMICRON disruptions driving more inflation. This will now be a battle to the death between stagflationist robots
The global energy shock that came out of nowhere last year and has rocked markets and economies ever since is once again easing, this time on a mild northern winter: European gas consumption is down and storage has lifted unexpectedly: The US has also been warm which has helped enable a flood of LNG across
The ferrous complex was strong on January 11, 2022 as everything jumped: Encouraging bulls, steel production launched in late December: Even more bullish, mill steel inventories plunged over the period. However, I’d suggest that this is largely thanks to traders snapping up steel stocks amid the mad rush. I will add that it is likely
The ferrous complex was weak on January 10, 2022 as everything eased: There is some seasonal help coming from Brazil: Heavy rainfall in the iron ore hub of Minas Gerais state, southeastern Brazil, led to mining and railing disruption for Vale and other operators, supporting a recovery in benchmark China iron ore import prices. …Vale,
The ferrous complex was mixed on January 7, 2022 as spot and steel lifted but paper fell: The rally over Xmas looks like pretty typical seasonality to me. Steel mills finished the year with low iron ore inventories, despite the great and growing port pile, and enough hope for stimmies that restocking made sense.
As we slide into the end of the calendar year, performance charts are propping up and this one from trader Steve Burns showing the year to date (YTD) runs in commodities and other assets is fascinating: Big moves higher in fossil fuels after being oversold during the first phase of the COVID pandemic, but real
UBS contend that 2022 will not the year for mining, as the macro backdrop weakens as global demand slows down post-pandemic amid tapering of stimulus and easing of supply constraints. They reckon to avoid iron ore and coal, with their new commodity forecasts are as follows: We maintain a sector underweight but within that
The ferrous complex was weak on December 10, 2021 as spot fell, paper and steel were soft: Westpac has a good wrap of where we are: Our forecasts have iron ore drifting down to US$75/t by end 2022. You could put together a stronger argument for iron ore based on demand finding a base, PBoC
The ferrous complex was soft on Dec 9, 2021 as all prices eased: There’s no good news to report. Evergrande has gone bust with a queue of others behind it. Chinese credit is still weak. There is no material rebound in steel output coming over the next quarter, probably half year. The only thing keeping
The energy crisis is back but its causes are narrowing swiftly to Europe where things are getting worse. The European gas market is tightening as winter arrives and prices are up again: Driving JKM futures crazy: Lifting thermal coal: And coking coal: This all matters a lot to Australia. It also brings in iron ore
The ferrous complex was weak on December 8, 2021 as spot fell, paper fell more overnight and steel was shellacked: CISA’s latest steel output number crashed to all new lows, falling below 2016 levels. It’s only a flesh wound: However, there was reason for bulls to celebrate on thermal coal which lifted and therefore holds
The ferrous complex boomed on December 7, 2021 as everything roared on new stimmies. Paper flamed out overnight but this looks like a typically maniacal bear market rally so it could easily go further: However, under the surface, the setup remains dire. China imported nearly 105mt of iron ore in November: But the rolling annual
The ferrous complex was firm on December 6, 2021 as spot lifted, paper soared overnight and steel eased: The Chinese RRR cut triggered the futures jump. I have no idea how far it will run. Coal futures went the other way and that’s what actually matters: As prices for coal and electricity fall in China,
Chinese coal prices are still trending lower. Seaborne thermal coal has come off its latest spike: Inventories are still normalising: With demand now down materially on the year: China announced higher contract prices to local coal production robust for the future: China plans to raise the benchmark price for long-term coal contracts in 2022 after
The ferrous complex was firm on December 3, 2021 as spot eased but paper and steel jumped: The news of more stimulus coming did the trick. Yawn. Steel output remains terrible but demand has firmed a little according to Mysteel: Perhaps a little bit of infrastructure demand has filtered through. Or not. Nothing has changed
The ferrous complex was weak on December 2, 2021 as everything fell: Brazil released its November export figures at 29.1mt, up solidly on last year YTD is a good gain. Expect roughly the same next year: In terms of power prices in China, thermal coal futures have fallen away again: As have coking coal futures:
The ferrous complex was mixed on December 1, 2021 as spot firmed, paper fell overnight and steel was up: The news remains terrible: China will boost domestic iron ore production by 30 per cent, significantly ramp up investments in overseas mines and strengthen scrap steel recycling under a plan designed to break Beijing’s dependency on
The ferrous complex is inhaling deeply on the crack pipe again as spot and paper hold while steel firms: The state of iron ore commentary in the press today is embarrassing. Just because some company says something doesn’t make it true. Indeed it usually means the opposite is likely: Vale said on Tuesday it would
The ferrous complex was firm on October 29, 2021 as hope trumped sense in the ongoing bear market rally. Spot was up, paper boomed but steel fell: It’s pretty much all bulldust in this market now: Iron ore futures in Singapore jumped nearly 10% as optimism over a bout of restocking by China’s steel mills
Has China buckled on Aussie coal? There are some signs that it has done so: Australian miners are increasingly optimistic they may be able to resume selling coal to China, after official data confirmed small volumes of Australian coal cleared the Asian superpower’s borders in October. China imported 2.78 million tonnes of Australian coal in
The ferrous complex was hit on Friday 26th of November as the relief rally stalled then got infected with NU. Futures and steel were hammered: The latest drip of data is all bad. Mysteel’s weekly indexes are crap: Mid-November CISA output was terrible: Capital Economics is forcing me to review my assessment of the usefulness
The ferrous complex remained bonkers on November 24, 2021 as spot popped the ton, paper calmed overnight and steel took off: Some of this is obviously the massively overblown hype around Chinese stimulus. But, equally important is probably the return of the energy crisis. Coking coal futures are continuing to fall: But, thermal coal has
The ferrous market jizzed in its pants on November 23, 2021 as paper rose, paper spent the day limit before sobering last night and steel firmed: The turn in Chinese stimulus that is underway is so far a lot more modest than the market reaction to it. It will remain that way so long as
The ferrous complex was strong on November 22, 2021 as spot jumped with paper but steel fell back: There’s much excitement about more Chinese stimulus but that’s just the usual Pavlovian dogs. At this juncture, there is nothing coming that fundamentally alters the oversupply of iron ore. What matters more is thermal coal prices. They
It’s looking good for the transitory inflationists as energy prices free fall around the world. The oil price has flamed out as the US and China combine to thwart Goldman Sachs with releases of strategic reserves. Europe’s COVID outbreak and the Chinese property bust are not helping: Even Goldman admits a surplus now looms in
