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


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


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


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,


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


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.


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


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


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


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


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


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


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