The ferrous complex faded on June 30, 2022: At issue was the Chinese PMI. The wider bounce did not translate to steel. Indeed, the Steel PMI was as bad as it gets: Judging from the steel industry PMI surveyed and released by the China Federation of Iron and Steel Logistics Professional Committee, in June 2022,
The ferrous complex cooled on June 29, 2022: As noted in recent days, we are seeing a jump in Chines property sales though it is very likely pent-up demand and there are seasonality issues with holiday timing: Now, some are seeing the bottom: The recent comments by Yu Liang, Chairman of property developer China Vanke
The ferrous complex surged on June 28, 2022: Enough good news out of China’s recent wins against COVID and lifting seasonal tailwinds were enough to trigger the rally. Seasonality can be especially powerful for iron ore so do not overlook that factor. Th next two months are typically very strong before we get crash into
The ferrous complex was mixed on June 27, 2022: Not very convincing price action there. Steel is still very soft. Iron ore selling has outstripped most other hard commodities in recent weeks so some sort of snap-back is normal. I have no hard view on whether we go immediately lower again. Seasonal trends are about
According to Bloomberg the project is going great, the Guineans not so much: What kind of world is it in which a “national champion” ravages one of the world’s poorest nations in partnership with Australia’s greatest sovereign threat in order to trash our number one export? Noice work, RIO!
There is no hotter name in market economics right now than Zoltan Poszar. FTAlphaville singles him out for hagiography: There are financiers whose names adorn gallery wings and university dormitories. The world of money has even yielded a few who can be identified by first name only — at least to insiders. But there is
The ferrous market sort of bounced on Friday June 24: Futures pooped overnight with the wider market rally. News remains dubious: While “market confidence has been restored to a certain extent”, Sinosteel Futures analysts said the absence of any additional and specific economic stimulus measures from Beijing will limit any price gains for now. In
The copper chart is not pretty. After being driven to all-time highs by Wall Street spruikers it is now crashing: The long-term story for copper is no shortages at all. The great EV and power transformations can largely be absorbed by recycling. There is also plenty of supply coming on stream in the next few
Goldman’s commodity bubble-blowers are capitulating: Macro markets today are facing a navigational challenge worthy of Odysseus. In the Greek myth, Odysseus chose to risk his ship by sailing close to the rocks of Scylla rather than risk being pulled under by the whirlpool Charybdis. In our view, policymakers are trying to navigate between the Scylla
The ferrous complex rebounded on June 23, 2022: CISA data for Mid-June came off but is still ridiculously high: The news that firmed the market was this: Chinese President Xi Jinping pledged to meet economic targets for the year even as the government’s zero tolerance approach to combating Covid outbreaks and a weak housing market
The ferrous complex was weak again on June 23, 2022: Ferrous markets and the MSM are finally catching down to the reality that’s been obvious for months: The answer to that seeming disconnect may be over-optimism in China’s steel industry, which ramped up production even as Covid-19 was hobbling the economy. Crude output of the
The ferrous complex stemmed the bleeding on June 21, 2022: I maintain that we have a lot of downside ahead as the global economy stalls into recession but we should note that there is a strong element of seasonality in recent moves as well. June is the peak hot and wet season in southern China
Finally, some reality set in for the ferrous complex on June 20, 2022: The rout is being led lower by steel prices in China: I don’t think that it is unreasonable to expect a return to the 3500 range for rebar. To wit: “Construction starts have not been strong and finally the orders have stopped,”
The ferrous complex was hammered on June 17, 2022: Early June CISA steel output fell away but is still very high: Which is holding mill inventories very high as well (I’ve adjusted this UBS chart): Where steel prices go, iron ore follows: At least, usually, that is the case. In more recent times, the ferrous
The ferrous complex was hammered on June 16, 2022: In news, this is big: China is moving to consolidate the country’s iron ore imports through a new centrally controlled group by the end of this year, as Xi Jinping’s administration seeks to increase Beijing’s pricing power over the industry. The initiative, led by the China
The ferrous complex was weak on June 15, 2022: The mystery is this. Chinese steel output is still insane, down just 3% year on year (though it is 6%+ YTD): But the main drivers of steel consumption are terrible. Housing starts are back in the dark ages: In rolling annual terms, which might give us
The ferrous complex was hammered on June 13, 2022: MySteel indexes are still terrible: Cars and coal are weak: ‘ Cement is piling up: It’s fugly and is starting to impact coking coal which has fallen a lot more than iron ore in the past few days: We are warming up for an almighty puke
The ferrous complex was weak on June 9, 2022: I noted yesterday that CISA output is at all-time highs: And noted as well that housing starts are down 40% (and more) which once fully absorbed into steel output is 160mt less steel than last year, an enormous drop. Some explanation for the disparity arrived with
The ferrous market was stable on June 8, 2022: According to CISA, the last ten days of May were the highest Chinese output ever: I’m baffled. Where is all the steel going? Property is, if you’ll pardon my French, fucked: By itself that is 160mt of less steel than last year. Yet here we are
The ferrous complex launched on June 2, 2022 along with everything else: The days of iron ore operating as a discrete market free of fiancialised influences are over. It is now pure correlation. Despite still awful fundamentals: And terrible newsflow: China has recently approved a plan to step up domestic iron ore supplies and reduce
The Australian Bureau of Statistics (ABS) today released international trade data for April, which recorded a $757 million increase in Australia’s trade surplus to $10,495 billion: According to the ABS: The seasonally adjusted balance on goods and services surplus increased $757m to $10,495m in April. Goods and services credits (exports) rose $479m (1.0%) to $50,378m,
The Reserve Bank of Australia’s (RBA) index of commodity prices fell 2.0% in May in SDR (currency-weighted) terms from the prior month’s record high: However, over the May quarter commodity prices surged 8.2% over the quarter and 30.4% year-on-year in SDR terms. The RBA’s commodity price index in SDR terms has historically closely tracked the
The ferrous complex was stable on June 1, 2022 though Dalian is still overheating every night: Bejing is doing its best: Beijing ordered state-owned policy banks to set up an 800 billion yuan ($120 billion) line of credit for infrastructure projects as it leans on construction to stimulate an economy battered by coronavirus lockdowns. The
If you want to know how up against it the Fed is in its fight to bring commodity prices under control today then look no further than the latest from Goldman: Hoarding tees up the next leg higher. In the past two months, hoarding by consumers has concealed just how weak commodity demand has been.
Here’s the hilarity of the east coast energy crisis laid bare: Origin Energy has slashed its energy markets earnings forecast for 2022 by a quarter and withdrawn earnings guidance for the 2023 financial year amid huge volatility in electricity markets and coal supply problems at its Eraring plant in NSW. The power operator said energy
