Commodities

Recall this from Fairfax: The group was clever enough to strike a construction deal that transferred the blowout costs on the project and much of the potential losses caused by any delay to its head contractor – Korean giant Samsung C&T.

Big iron can’t catch a bid today despite Friday’s rally in iron ore, largely owing to more poor China data over the weekend.

The China steel PMI was out over the weekend and is not well.

From the AFR: Shaun Verner, BHP’s vice-president of marketing for coal, told Fairfax Media the testing was hurting sentiment and making it “much more difficult” and slower to sell tonnes into China.

From Credit Suisse: As the ACCC inquiry rumbles on for the East Coast gas market, the LNG projects have started and sadly capital continues to get pulled from the domestic space.

Do the big miners actually believe this stuff, from The Australian: BHP has not reversed its expectations for a service-led recovery in China’s growth, with marketing boss Arnoud Balhuizen saying the company is maintaining its position that the Asian powerhouse’s economy will pick up this half.

The Brent oil price climbed again Friday night to $49.46 as the US dollar weakened, Obama authorised boots on the ground in Syria, a slew of oil majors continued to cut capex plans and the US oil rig count resumed sharp falls down 16 to 578: So much for stabilisation.

Here are the iron ore price for October 30, 2015: Tianjin benchmark added 1% to $49.50.

Awesome!

Big iron is hurting today with BHP down -1.5%, RIO down -0.5% and FMG down -3.5%:             Can we rebound here?

You can’t keep the dumb down, from the AFR: “Morgan Stanley points out that historically, catastrophe losses during El Nino events are on average 40 per cent lower than in periods when La Nina occurs.” Resources companies would enjoy a net benefit.

Here are the iron ore price charts for October 29, 2015:   Iron ore continued its passage south yesterday with Tianjin benchmark falling another 1% to $49.

The Brent oil price retraced solidly last night to $48.59 after its pointless short squeeze yesterday.

Fairfax’s Stephen-Cauchi is on a roll today: Rio Tinto has beaten BHP Billiton as Citi’s preferred pick among the big miners, retaining its “buy” rating despite a heavy reliance on iron ore.

Big iron continues to melt down today despite the lunacy sparked by Wall St.

By Leith van Onselen ABC’s The Business ran a great segment last night looking inside Australia’s coal bust and the impact it is having on mining services companies.

From Fairfax, the falling iron ore price is all good: Nor is it likely the move will spark a wholesale downgrading of mining and iron ore stocks, despite the uncertainties of Chinese steel demand and the forthcoming El Nino summer.

Here are the iron ore charts for October 28, 2015: Tianjin benchmark spot price fell sharply as well to $49.50.

The Brent oil price reversed course sharply last night for no reason at all, up 5% to $49.

From Bloomie: Fortescue Metals Group Ltd., Australia’s third-largest iron ore supplier, said it’s got an extra $1.5 billion available for further debt repayment as cost cutting has boosted cashflow.

From the AFR: Ben Silluzio, the chief investment officer and CEO of start-up investment firm, Qato Capital, thinks shares in BHP Billiton could fall 30 per cent by the time the mining giant reports its half-year results in February.

Brent oil was whacked again last night to $46.65 as I write as the US budget wrangles resulted in a deal to sell some its strategic petroleum reserve, from Bloomie: The U.S.