Courtesy of ANZ. ANZ Commodity Daily 698 050912
0
Commodities daily
Primary Section
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
17
Fortescue ushers in the ore production cuts
And so, the real pain begins. From Bloomie: Sept. 4 (Bloomberg) — CEO Nev Power says in statement that staff numbers, operating costs would be reduced immediately to save ~A$300m. * FY13 capex guidance cut to $4.6b from $6.2b * Co. sees FY13 output 82Mt–84Mt vs prev guidance 86.5Mt equity tons * Co. to defer Kings development
4
Iron ore price weakness returns
It’s not been much of a bounce so far. Here’s yesterday’s ore score: That’s some ongoing carnage in Chinese steel prices: More forells ahead it seems.
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
0
Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 695 310812
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
47
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
0
Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 693 290812
65
Iron ore price falls threaten an income recession
By David Llewellyn-Smith Yesterday in the land of commodity research, various research houses attempted to catch up to the reality of a falling iron ore price. Until this recent price collapse (down 30% in a couple of months to $95) iron ore prices were widely considered to have a “price floor at $120”. The price
7
Pettis: Hard commodity prices will halve in 2 years
Excerpted exclusively from Michael Pettis latest newsletter: For the past two years, as regular readers know, I have been bearish on hard commodities. Prices may have dropped substantially from their peaks during this time, but I don’t think the bear market is over. I think we still have a very long way to go. There
25
Morgan Stanley warns of $83 iron ore price
From The Australian: GLOBAL investment bank Morgan Stanley has downgraded its price forecasts for bulk commodities and warned that the spot price of iron ore could fall as low as $US83 a tonne in the coming months. …“Similarly, hard coking coal prices could have downside of 5 per cent to 8 per cent from the
6
ANZ capitulates on iron ore price floor
There’s no good news in the ANZ’s new note on iron ore. It’s brief, too the point and gloomy. Farewell $120 price floor. ANZ Commodity Insight Iron Ore Aug12
6
All quiet on the iron ore price front
All quiet on the ore front yesterday with little movement anywhere (though swaps haven’t updated yet): As some buying support appears to be coming back into the market, I thought it worth revisiting a chart from Morgan Stanley from last year’s falls: Take a close look at the very sensitive relationship between the iron ore
0
Coking coal still sliding
From the ANZ: Newcastle FOB physical thermal coal prices were steady last week at USD89.05/t. Although market activity remained subdued, the end of the Muslim holiday of Eid al-Fitr in Indonesia should see more movement this week. Having hit a low of a low of USD81-82/t in late July, thermal coal prices have held up well. The same cannot be
2
Credit crunch seizes iron ore price
Friday’s ore price movements showed some stabilisation: With 12 month swaps catching a break, there is some hope that last’s week’s heavy dump was the capitulation phase for the ore price. There is not much hope in the fundamentals, however, with rebar falling to a new low and little discussion so far of Chinese steel-makers
0
Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 690 240812
34
“Keep taking the pills, Nev”
Fresh and cross-posted from FT Alphaville, comes this unusually frank assessment of Fortescue and iron ore. Remember the joke about the $120 iron ore price floor? How we laughed. And for continued amusement here’s Nev Power, chief executive of Fortescue Metals,the highly-leveraged poster child of the Australian resources boom, discussing iron ore at Wednesday’s annual results announcement. From
25
Iron ore price smashed
By David Llewellyn-Smith Several pictures speak billions of words. $100 iron ore passes like a thief in the night.
2
Implications of the US drought
Find below a solid note from NAB on the fallout from the US drought on soft commodities, with some good news for exports for a change. Implications of the US Drought – August 2012
7
And now for coking coal…
I have been a bit confused by some of the spot versus contract pricing going in the market for coking coal. It appears I got my quarters mixed up. From ANZ today, there’s clarity, sadly: Newcastle Sept coal futures fell mildly to USD91.5/t. China’s total coal imports fell 10.3% m/m to 20.2mt in July, but is still
11
Iron ore crash goes on
Ore got walloped and swaps got monstered again yesterday: Here’s the latest on market internals from Reuters: Shanghai steel futures hit a record low on Wednesday, exerting more pressure on prices of the raw material iron ore whose freefall has forced Chinese steel producers to skip contracted cargoes. Chinese mills, the world’s biggest iron ore
2
Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 688 220812
76
End of an era for iron ore?
The world steel association released its July production report overnight and the news is not especially good: World crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 130 million tonnes (Mt) in July 2012, an increase of 2.0% compared to July 2011. China’s crude steel production for July 2012