Courtesy of ANZ. ANZ Commodity Daily 757 101212
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Commodities daily
Primary Section
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Gas boom or gas gloom?
The Australian today writes that: The worldwide expansion of gas production may force Australian exporters to settle for lower prices after a Japanese company negotiated a landmark contract pegged to US domestic gas prices. The deal between Kansai Electric Power and BP is the first contract in Japan to be linked to gas rather than
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Daily iron ore price update (the rocket returns)
Find above the iron ore price table for December 7, 2012. As you can see, spot hit the afterburners. Last week’s Politburo rhetoric and a little support from rebar seems to have sent traders barmy bullish. Good for them, what’s the evidence? First, here’s the ore chart: And the steel chart: Local bulk shipping rates
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Daily iron ore price update (what volume growth?)
Find above the iron ore price complex chart for December 6, 2012. Some more stability clearly, no doubt on the ongoing hope that China will support growth, as the Politburo suggested. Still, for now, the raw volume figures remain lacklustre. Here is the November Port Hedland shipping chart for iron ore: Figures tend to weaken in
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US DOE report gives green light to LNG exports
An important report economic modelling report commissioned by the US Department of Energy (DOE, which will determine the extent of LNG exports) has concluded that there is no senario in which the US does accrue net benefits from expanding its LNG exports. The report by NERA is available in full here. It’s conclusions are as
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S&P: LNG price convergence in the long term
S&P has a note out affirming that the ratings for LNG companies will be supported by favourable regional pricing for a few more years: Global gas prices have increasingly diverged in the past two years, highlighting differing demand-supply dynamics and gas price conventions between regions. The divergence also demonstrates the arbitrage opportunities that exist between
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Gorgon ugly
From the AFR: Chevron has suffered a cost blowout of almost $10 billion at its Gorgon liquefied natural gas venture in Western Australia, with labour costs, poor productivity, logistics problems and weather delays taking the budget up to $52 billion. More upgrades to Australia’s spending pipeline! But seriously, this is not as bad as feared,
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Daily iron ore update (correction over?)
Find above the iron ore price complex table for December 5, 2012. As you can see, for yesterday at least, the gap between swap and spot was closed in favour of the latter: So, is the correction over? I don’t think so. And neither does ANZ, which released its monthy forecasts for the commodity complex
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 756 041212 (1)
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Daily iron ore price update
Find above the iron ore price complex chart for December 4, 2012. A good day for iron ore, defying my recent pessimism. Still, it seems I’m not the only one expecting ongoing falls. From Reuters: Construction activity slows during winter in China, cutting demand for steel products, whose prices have fallen recently to levels last seen
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 756 041212
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Vale slashes capex
Brazil’s Vale has announced further cuts to its planned iron ore expansions. From the Globe and Mail: Brazil’s Vale SA , the world’s second-largest mining company, cut estimated 2013 capital spending by 24 per cent after a global slowdown and a drop in iron ore prices led the company to rethink its outlook for expansion.
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Daily iron ore price update
Here is the the iron ore price complex chart for December 3, 2012: Spot still resilient, really, with some hope as well that swaps have bottomed. Not so long as Chinese steel prices keep falling, however. In some good news for the bulks and beleaguered thermal coal miners, it looks like a breakout from the recent
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Iron anvil falls on Sundance
Things are not looking good for the iron ore juniors. From BS: Shares in Sundance Resources remain in a trading halt, as a potential takeover deal with suitor Hanlong Mining appears to be falling apart. Sundance released a statement on Monday saying Hanlong wanted to delay the deal because it could not secure credit approval
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Coking coal restock done
From ANZ: Last week Newcastle physical thermal coal prices were up 2.5%, but iron ore and coking coal prices fell 2.8%. Australian thermal coal prices gained on improved activity on-screen ahead of January annual term talks between producers and Japanese utilities. Traders were reportedly covering short positions ahead of year-end. Premium hard coking coal prices ended the week lower, in line
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Daily iron ore price update (India prevents a crash)
Find above the iron ore price table for November 30. As you can see, the slide is gathering pace, especially in China where rebar is now crashing towards its low for the year: Given this, the spot price is still dramatically out-performing: The percentage spreads between spot and swap and spot and rebar thus remain
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 754 301112.pdf
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Daily iron ore price update (more weakness)
Above is the iron ore complex table for November 29. As you can see, falls in the broader markets continue to outpace the spot price. In the past this pattern has preceded big falls in spot as it capitulates suddenly, falling absolutely, as well as closing the spread to swaps. In news today, as we
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 753 291112
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Rio cuts (but what?)
But what exactly? The AFR and BS are reporting it’s all about productivity: Rio said it had boosted the size of the expansion plans to 360 million tonnes from 353 million tonnes previously through de-bottlenecking and productivity improvements with minimal spend. It has a current production capacity of 237 million tonnes and expects to reach 360 million
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Daily iron ore price update (billionaires to wipe themselves out?)
The news continued to be poor in the iron ore complex yesterday: Although spot held up, it’s on its Pat Malone and it won’t last. The caning of rebar is especially a concern and it is quite clear that the restock is done, not just in ore but it appears steel as well: The refusal
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Thermal coal gets a boost
Courtesy of ANZ. ANZ Commodity Daily 752 281112.pdf
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BREE describes mining boom peak
BREE (Bureau of Resources and Energy Projects) has released its much anticipated major projects update and although the numbers are epic, the peak is very much in sight. Just to confuse, BREE has introduced a methodology, making like for like comparisons with past reports difficult: This release of the Resources and Energy Major Projects report
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Daily iron ore price update (Nev powers back)
Here is today’s iron ore complex chart, where the correction continues: And the chart: Still no spread compression, which tends to happen during decent corrections, so plenty more downside potential for spot. Today’s news is the fightback offered by Fortescue’s CEO, Nev Power, yesterday. From The Australian: FORTESCUE Metals Group chief executive Nev Power has
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 751 271112
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Daily iron ore price update (squeezing FMG)
Here is today’s iron ore complex chart: And the ore chart: As well as steel chart: The restock and rebound is over for steel and iron ore seemingly. This may be seasonal, coming into the slower winter months, but the falls in the 12m swap speak volumes to me. This has been a very weak
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 750 261112
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Daily iron ore price update (ore vs FMG)
Here is Friday’s iron ore complex price table: And the chart: And Chinese steel: Rebar’s roll over does not bode well for short term prices. Neither do the key spread charts. First, ore to rebar in percent, which is too low: And ore to 12m swap is too high for the $120 price level: Definitely
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The US gas triple threat
By Leith van Onselen The Sunday Age/SMH ran two articles picking-up on the looming threat to Australian coal and gas exports caused by the shale oil and gas boom currently gathering pace in the US. First, here’s David Pott’s take on the situation (my emphasis): …our sovereign debt is low by global standards, but it’s
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 749 231112