Bulk strength or bulk trouble?

It’s been a while since I visited iron ore prices. The miracle commodity has been performing well and is one indicator that has been defying a broad range of weakening indicators in China. The overnight price is near the top of its trading range since last year’s fall: That’s now a pretty decent recovering trend


Chart of the Day: pining for wine

I was going to post a more gruesome chart of the flash PMI’s from Europe last night, but Delusional Economics is writing a report on the result, so this chart from The Economist should take its place: It really is a two speed global economy with the USA, China and Russia expanding,  whilst in percentage


Citi weighs in on commodity super cycle debate

Citi has joined the recent debate about whether the commodity super cycle is finished (or nearly so) with an argument in the affirmative. Bulls like to point to the fact that the apparent intensity of use for steel (in terms of kg per capita) for China is still well below some other countries at their peak. However,


Commodity exports to the moon!

By Leith van Onselen The Bureau of Resources and Energy Economics (BREE) released its Resources and Energy Quarterly—March quarter 2012 (report below) yesterday, which provides a bullish outlook for Australian commodity exports. From the press release [my emphasis]: Australia’s resources and energy commodity export earnings are forecast to continue to grow over the medium term


More steel bears

After yesterday’s bombshell from Ian Ashby, President of BHP iron ore, Citi published a report on steel which said that steel-making raw materials are “capped on the upside” because the Chinese porperty sector continues to normalise.  Global crude steel production, they believe, will only grow half the rate of 2011 for this year: We think steel-making


Commodities up in January

The RBA released its monthly Commodity Price Index this afternoon and the “once in a century boom” continues: Preliminary estimates for February indicate that the index rose by 1 per cent (on a monthly average basis) in SDR terms, after rising by 1 per cent in January (revised). The largest contributors to the rise in February were increases in


NAB’s commodity forecasts

Find attached NAB’s monthly commodity forecasts. She’s a slow old day so this might make some interesting reading. It’s a reasonable enough document though with my own view that China is likely to struggle with a bouncy (though not hard) landing I’ll take the under on most projected prices. Commodity Update M&E – Feb 2012


Ore gets another towelieing

So, as predicted, ore looks vulnerable and continued its weakness last night. The spot prices got whacked another $2.20, down 1.6% to $137.40. We are still some ways above the next chart supports at $130.80, the post rout lows of late last year: Sadly for the miracle commodity, the 12 month swaps, which tend to


Ore looks vulnerable, again

Iron ore has had a nice bounce since the October rout of last year but there are signs that that has run its course and new weakness is appearing across the charts. For a start, the spot price itself has rolled over and is accelerating downwards: Next, a look at the 12 month futures is


Peak oil and growth

Yesterday’s oil production chart prompted some interesting discussion on the economic outlook for a world facing physical limits to energy resource extraction, and the peak of oil production in particular  It is one more important factor to add to the impact of debt dynamics and the political response to recessionary conditions when considering the global


Ore’s not well with iron ore

On the heel’s of the release of the RBA’s paper on the mining boom, and the excellent analysis by The Unconventional Economist, comes a Dow Jones Newswire piece, reposted at The Oz: Global demand growth for iron ore is set to slow in 2012, bringing down average iron ore prices from last year’s record high.


Commodities press Oz equities

Usually when I think of the CRB (Commodity Research Bureau) Index I’m looking at it as part of my toolkit for the Australian Dollar outlook. But I was talking to a few mates over in Perth yesterday and thoughts turned to the relationship between the CRB and the S&P ASX 200. We all have our


La Nina strikes back in 2012

Some fascinating an in-depth research from Forecast: “Keep an Eye on the Baby”. The summary: La Nina returns, and is seen persisting through northern hemisphere spring and maybe summer The impacts are well-known after the disastrous effects of the – albeit more severe – 2011 episode Foodstuff prices could again spike further – agriculture index


Commodity prices fall again in December

The Reserve Bank of Australia (RBA) yesterday afternoon released its Index of Commodity Prices for the month of December. According to the release: Preliminary estimates for December indicate that the index fell by 1.0 per cent (on a monthly average basis) in SDR terms, after falling by 0.2 per cent in November (revised). The price of gold


Bulk trouble

According to the AFR this morning: Falling industrial output in Australia’s key mineral export markets of China and Japan is putting pressure on energy coal prices. China is reportedly pushing back on shipments of thermal coal from Australia and Indonesia as inventories in Qinhuangdao and Guangzhou, as well as at coastal power stations, continue to


Iron ore volumes holding up

Find above the updated chart for Port Hedland iron ore shipments. November numbers were down 2% with China down 1%, Japan up 10%, and the ROK down 12% and Taiwan down 39%. To put it bluntly, only China matters.


Brazil’s huge hopes sinking?

Reuters reports this facinating tale this morning from Brazil: The world’s largest iron ore carrier is disabled and could sink at a key Brazilian port from where Vale, the world’s No.2 mining company, loads about 10 per cent of the global iron-ore trade, shipping agents and media said on Monday. The crippled Vale Beijing is


Commodities rise in November

The Reserve Bank (RBA) released the Index of Commodity Prices today, with preliminary results suggesting a rise of 0.2% for November, for a total rise of 16% for the year (in AUD) and remain at record high levels. Preliminary estimates for November indicate that the index rose by 0.2 per cent (on a monthly average


Mining projects go ballistic

From NAB today comes this little note on a big subject, the developing pipeline of major mining projects: AUS: Resource project listing sky-rockets to $232bn from $173bn in April Prior to the release of the Government’s mid year review of the Budget this morning, an updated listing of major resource development projects has also been


Iron ore weakens again

The SMH report this morning that Rio is striding towards ever greater expansions of its iron ore output: Rio Tinto has revealed plans to expand its flagship iron ore operations in Western Australia beyond previous expectations, but the news has been dampened by confirmation that capital costs for the project will also rise higher than


Is Dr Copper worth a look?

Copper is a sort of middle of the pack commodities play, and Australian copper companies are in the middle of the pack in global terms, according to UBS. The price has been weak in recent months because of the general nervousness, risk aversion, and concerns about Chinese growth. There are predictions of limited mine growth


Precious palladium

In a recent discussion with a gold and precious metals analyst I have known for a long time, he described a gold conference he recently attended in Europe. Many of the European investors who attended, mostly German and Swiss, were, he said, not really there to learn about the market. They were there to buy


Chart of the Day: Oil is oil

Today’s chart plots the widely quoted West Texas Intermediate Crude (WTI) price against the ICE Brent Crude price since the early 2009 low following the GFC (non-Australian readers call this the Great Recession) The chart shows the recent divergence, whereby the former corrected alongside other “undollar” assets, whilst ICE Brent remained resilient has now closed,


The race for ‘first gas’

While debate continues around land access and groundwater contamination, the coal seam gas industry in Queensland is powering ahead in a race for ‘first gas’.  Which begs the question, why the rush? It is no secret that government is a few steps behind the resource companies in terms of providing a solid regulatory framework for


Chart of the Day: Crude divergence

Today’s chart plots the CRB Index, a weighted basket of 19 commodities, against the two major crude oil products, West Texas Intermediate (WTI) and ICE Brent Crude. The horizontal orange line was the support area for the CRB during the minor correction throughout the 2006-07 lows, before the large bubble in commodity prices through 2008,