Commodities

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Iron ore price weakness set to resume

Yesterday ANZ had an interesting conference call about iron ore, China and Australia. The economic legs were all a bit sunny and happy but the iron ore dimension was very good: 2. MARK PERVAN, HEAD OF COMMODITY RESEARCH Thoughts from China General mood very cautious, key export province Guangdong seeing activity down as much as

1

Iron ore price cracks the ton

And there you have it! Iron ore raises its bat to the crowd and the dressing room, cracking the ton! And the charts: And Chinese steel following through: Adding to the joy, China’s steel output fell materially in August, down 4.9% to 1.89 millions tonnes per day in August from 1.99 million tones per day

2

Coking coal falls heavily

We may be seeing the beginnings of a bottom for iron ore but the same can’t yet be said for coking coal. From ANZ: Spot thermal coal fell 2.3% to USD86.37 last week, while coking coal shed 5.4% to USD153.20/t. Coking coal prices continue to drift lower as buyers stay on the sidelines awaiting the results of Q4

3

An iron ore squeeze

It’s an eye-popping iron ore table today: So, the exuberance of last week finally seized parts of the steel complex with 12 month swaps hitting the proverbial afterburners. Up 9.1% on the day! And who said there’s no speculation in the iron ore markets? Spot followed with a solid climb: Needless to say, with the

5

More bad news for coking coal

Courtesy of ANZ Newcastle September coal futures fell 0.2% to USD91.2/t, while spot coking coal is trading at USD160.44/t. The Vice Chairman of the China Chamber of Commerce announced China will remove the 40% export duty on coking coal in line with a WTO ruling. This could be reflecting softer domestic conditions. China is a high-cost swing supplier and has exported

3

Iron ore price stabilising?

It’s all good today! Not much movement overnight in the steel complex but enough to suggest that the big falls are behind us. 12 month swaps are starting to price with some consistency in the mid $90s range: There is also clearly a lift in broader sentiment as Draghi applies his band-aid and although it

1

Iron ore volumes showing the pain?

Yesterday Port Hedland released its August shipping statistics including iron ore tonnages, which looked like this: Not bad but closer inspection throws up a few worries. August tends to be a down month but this year the fall is 9.3% versus half that in the previous two years. Volumes tend to be highest mid year

6

RBA index of commodity prices: yuck!

Late yesterday the RBA released its August Index of Commodity Prices: Preliminary estimates for August indicate that the index fell by 3 per cent (on a monthly average basis) in SDR terms, after rising by 0.9 per cent in July (revised). The largest contributors to the fall in August were declines in the prices of

0

Coking coal still falling

From ANZ this morning: Newcastle FOB physical thermal coal were down 0.7% last week to USD88.41/t. Although Chinese domestic prices were steady, supported by the ongoing falls in coal inventories – Qinhuangdao stocks down 3.7% w/w. Expected supply disruptions are also supporting China’s domestic coal price, as scheduled maintenance is performed on the Daqin railway. Coking coal also fell 1.9% w/w

47

The long term price of iron ore

Here is today’s iron ore update: Hints of stabilisation on Friday but it’s still anyone’s guess if this is the bottom. I’m pretty skeptical so long as Chinese steel prices are still falling. Meanwhile my views on iron ore have been perfectly captured in a note by Ric Deverell, the widely respected head of commodities at

1

CISA puts the boot into iron ore price

Amid the dreadful iron ore coverage around the place today, there are a couple of articles worth reading. The first is from Bloomberg: China’s iron ore output probably fell about 10 percent this month as tumbling prices squeezed out costly producers and steelmakers used cheaper imports, the China Metallurgical Mining Enterprise Association said. Production will

5

Down, down, prices are down!

I was accused this morning of gloating over the accident that’s transpiring in Australia’s bulk commodities. Happily a bevy of readers came to my defence. But there is someone that is gloating over the accident and that’s FTAlphaville, which posted the following on the falling iron ore price today: We can laugh at ourselves can’t we?

0

Coking coal hits new low

From the ANZ today: Newcastle Sep coal futures lost 0.4% to USD89.9/t, while iron ore again fell heavily, losing 4.7% to USD90.3/t. Chinese steel prices continue to weigh on iron ore. Hot-rolled coil is nearing a month long losing streak, while the most active rebar contract on the SFE hit an all time low yesterday with open interest at record

17

Charlie Aitken defends the ore price

Via FT Alphaville comes this quote from Charlie Aitken: Right here right now the spot markets are in turmoil as Vale dumps cargoes, traders who have been caught long at higher prices cut that trading inventory, and Chinese steel mills sit on their hands and run down inventories. It is estimated that Chinese steel mill

41

Bloxo puts the commodities bull case

Paul Bloxham of HSBC  recently released a very good piece of research arguing that the global economy had made a structural shift towards emerging markets growth that would continue a powerful surge in infrastructure growth and support high prices for commodities for decades. I agreed with his note but disagreed with its conclusion, that this

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Iron ore price assumptions collapse

By David Llewellyn-Smith The iron ore complex tanked again yesterday: Perhaps some hope in the contango with the 12month which did signal the bottom in last year’s crash: But Chinese steel prices are still falling too: Here are some choice iron ore quotes from Reuters: “We believe that China is in the middle of a