Commodities daily

Find below commodities daily courtesy of ANZ. For extra spice I’ve thrown today’s bulks chart, which shows iron ore and 12 months swaps rolling over (blue and yellow). It will be interesting to see what the PROC versus Fed does to the price. Chinese steel prices have at least stopped falling for now (green and


A psychological slowdown

Find below another interesting note from the ANZ commodities team about a recent trip to China. It has some good texture and decent analysis around short term developments around stimulus, even if it fails to address the now widely accepted conundrum that China faces vis-a-vis the shelf life of its fixed asset investment model. ANZ


Chinese stimulus and iron ore

ANZ released an interesting note late yesterday on the prospects for a rebound in the iron ore price in second half. The note is interesting on a couple of fronts. Firstly, there are some mixed messages coming out of the bank about China’s iron ore stockpile. Regular readers will recall a recent video with ANZ


Mixed signals from the bulks

the news that China is not building apartments on the moon did not prevent a solid rally in iron ore spot and 12 month futures overnight. Both up almost 2% (white and yellow lines): However, as you can see, nobody actually in the Chinese steel markets seems to have gotten the AFR memo about imminent


Take Chinese bulk defaults in your stride

The ANZ commodity team has a note out this morning suggesting that recent defaults by the Chinese in the bulk commodity space is nothing to be worried about. The note contains some interesting detail and is worth a quick read. However, the note also argues that the recent weakness is not some harbinger of doom


Chinese defaulting on bulk contracts

The World Steel Association last night released April crude steel production statistics and news is mixed: World crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 128 million tonnes (Mt) in April 2012, an increase of 1.2% compared to April 2011. China’s crude steel production for April 2012 was


Is iron ore swimming naked?

It’s not until the tide goes out that you know who’s been swimming naked, said Warren Buffet famously. Today a video by Reuters of ANZ Bank’s Nicholas Zhu sneaking into Qingdao port to examine enormous stockpiles of iron ore raises the discomforting notion that some large component of Australia’s export boom is shriveling in the


Bulk weakness spreads

Australia’s balance of trade is getting beaten up again. Two of out three bulk exports are still sliding. Iron ore 12 month swaps are accelerating downwards: The spot price is following: China steel prices have also rolled over. Rebar: And hot rolled: Thermal coal fell too: Coking coal appears to be stable. The aggregate value


Where does all of that iron ore go?

ANZ has produced a useful note on the outlook for iron ore. Regular readers will recognise plenty of conventional wisdom at work here, with the basic argument being that ongoing modest growth in Chinese demand and the cost curve for supply will support prices in the $120 to $160 range. That’s fair enough if more


Are bulk commodities in a bear market?

If you’ve read MacroBusiness Morning, you’ll know that iron ore prices fell last night. In the past couple of weeks, the ore price has retraced modestly some 4.4% to $142.70. I’ve asked The Prince to give me a technical take on the bulks and the news is not all that great. First iron ore: There


Shale gas hype: Subprime 2.0

The following is by Yves Smith and is cross-posted from Naked Capitalism. It has some important implications for Australia’s own gas boom, not all of them bad.  If my RSS reader is any guide, most of the press about shale gas has focused on two issues. First, shale gas is in considerable supply, cheap to produce, and