Commodities

25

Rusty upgraded to Category 4 monster

The BOM just issued the following warning: TROPICAL CYCLONE ADVICE NUMBER 30 Issued at 5:36 am WST on Wednesday 27 February 2013 A Cyclone WARNING is current for coastal areas from Bidyadanga to Mardie including Port Hedland, Karratha and Dampier, and adjacent inland areas of the Pilbara, including Marble Bar, Nullagine, Millstream and Tom Price. A Cyclone WATCH

4

LNG exports safe, for now

By Leith van Onselen Over the past few months I have warned that two of Australia’s major export commodities – thermal coal and liquefied natural gas (LNG) are at risk from the shale gas boom currently underway in the US. The threat is two-fold. First, the huge increase in natural gas production derived from shale

1

Rio hit with downgrade watch

Rio Tinto has been placed on downgrade watch today by S&P: Global diversified mining group Rio Tinto’s leverage has increased beyond our previous expectations. We see a risk that Rio Tinto’s debt may rise further in 2013-2014, unless the company makes large disposals or iron ore prices stay well above $120/tonne CFR China. We are revising our outlook

21

Kloppers choppers

From the AFR this morning the biggest job in Australian business has changed hands: BHP Billiton has appointed non-ferrous division head Andrew Mackenzie as its new chief executive, replacing Marius Kloppers as of May 10. The move comes after BHP reported the lowest interim underlying profits since 2005, but is unrelated to the fall in

0

Coking coal price firms

Newcastle thermal coal prices fell slightly. The strike at Colombia’s Cerrejon mine continued into its second week with a resolution between Cerrejon, the Government and miners yet to be reached. Uncertainty over the strike, impacting about 30 million tonnes of thermal coal exports into the seaborne market, may have contributed to choppy trading over the past week. Meanwhile, coking coal spot

2

Daily iron ore price update (Rio is Fortescue)

No movement yesterday in the iron ore complex. The big news today is Rio’s earnings release (find it below) which confirms that the company is a ragingly successful iron ore company buried under a huge pile of…overmatter…to make it appear diversified and unattractive to suiters. The iron ore division contributed 44% of group revenue but…wait

3

Another hit for Aussie coal?

By Leith van Onselen It seems the hits just keep on coming for Australian coal exports. On Friday, I reported that the coal market could soon be facing hard times from growing global supplies and lower demand from China. Now, Bloomberg has reported that India plans to build a 327 kilometre rail network that would

8

Japan commences LNG shift from Australia

By Leith van Onselen In September last year, The Australian newspaper revealed that Japan was attempting to sever oil-linked pricing for Japanese liquefied natural gas (LNG) imports. Oil-linked pricing for Japanese LNG imports began in the 1960s. The gas price was linked to the price of oil because it was the substitute for Japanese power

3

The coal price pincer tightens

By Leith van Onselen Earlier this week, I prognosticated that Australian coal exports could soon be facing hard times due to: Increased competition from US coal exports, due to domestic coal-to-gas switching arising from the US shale gas boom; and A shift away from coal fired electricity generation in China due to rising pollution concerns.

0

RBA Commodity Price Index rises

From late Friday: Preliminary estimates for January indicate that the index rose by 2.6 per cent (on a monthly average basis) in SDR terms, after rising by 3.4 per cent in December (revised). The largest contributor to the rise in January was the increase in the price of iron ore, while the prices of base metals and rural commodities