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,
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Daily iron ore price update (Chinese property bottom?)
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
Daily iron ore price update (property scenarios)
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
Daily iron ore price update (short and medium term)
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
Zoltan the Magnificent gonged commodity top
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
Daily iron ore price update (still terrible)
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
And now for a copper glut…
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
The commodities bubble begins to burst
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
Daily iron ore price update (Xi’s drivel)
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
Daily iron ore price update (crunchy crashola sweet)
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
Daily iron ore price update (rebar rout)
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
Daily iron ore price update (cartel)
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
Daily iron ore price update (some explanation)
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
Daily iron ore price update (to the mooooon!)
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
Australia’s trade surplus rises $760m in April
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,
Commodity price index floats back to earth
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
Daily iron ore price update (buy now, think later)
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
When Origin can’t get coal, we must reserve it
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