Commodities

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Buy the iron ore dip?

Via the excellent Damien Boey at Credit Suisse: Today, we have seen the Dalian iron ore futures price fall by almost 6%. Many have been expecting a pullback in prices, as supply side pressures ease. But is there more to the iron ore price story than just a supply side squeeze? After all, one could

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Fortescue kills another iron ore boom

FMG is out with its quarterly production report: QUARTERLY HIGHLIGHTS • Safety TRIFR of 2.8, an improvement of 22 per cent compared to 31 March 2019 and a record annual result • Record quarterly shipments of 46.6mt including 4.7mt of West Pilbara Fines • FY19 shipments of 167.7mt, one per cent lower than FY18 due

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Daily iron ore price update (glut)

Reuters has the texture: Overall short-term macroeconomic conditions in China remain “bearish”, said commodities broker Marex Spectron. “We continue to pick up weakness in manufacturing and construction activity, which should mean steel demand will come under pressure,” said Marex analyst Hui Heng Tan in Singapore. “We are bearish on current demand conditions (for iron ore).”

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Daily iron ore price update (Hedland hurl)

Reuters has the wrap: The most-active DCE iron ore contract closed down 1.2% at 899.5 yuan a ton, while the rest of China’s ferrous complex edged higher. “You may see some correction today, or maybe tomorrow, but generally speaking, the uptrend is intact, with demand still supporting the prices,” a Shanghai-based trader said. China’s government

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And now for an oil shock!

From the IEA last night: The main message of this Report is that in 1H19 oil supply has exceeded demand by 0.9 mb/d. Our latest data show a global surplus in 2Q19 of 0.5 mb/d versus previous expectations of a 0.5 mb/d deficit. This surplus adds to the huge stock builds seen in the second

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Daily iron ore price update (glowing short)

The spot price crawled higher. Paper sold off. Steel isn’t going anywhere. In news, China is hammering speculators via Dalian price hikes, at Reuters: * China’s Dalian Commodity Exchange (DCE) said it will raise transaction fees for all iron ore futures contracts to 0.01% from 0.006% of the trading value, starting July 18, the bourse

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Daily iron ore price update (another run)

Spot jumped. Paper went nutso. Steel was firm but is still stuck. It was all about Chinese data which showed a big push into MOAR empty apartments: I just don’t think that this matters terribly. Record steel output: Hasn’t triggered much activity in Chinese iron ore imports even accounting for recent supply weakness: Presumably owing to

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Aussie coal piles up off China

Via The Australian: Some 15 million tonnes of Australian thermal coal worth more than $1 billion is waiting to clear customs in China, according to industry analyst Platts, with no sign of an easing in processing delays imposed since February. “Thermal coal market participants say they are yet to see any changes to Beijing’s import

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Gas prices crash everywhere but Australia

Via the AFR today: Evidence has grown in past weeks that customers in the top-tier markets of Japan and South Korea are prepared to act more aggressively than ever before in price review negotiations to reduce the large disconnect between their crude oil-based contract prices and the rock-bottom spot LNG price. …The world’s biggest LNG

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Oil price spikes as storms gather

by Chris Becker It wasn’t just a dovish Fed boosting all undollar assets overnight as a multitude of storms lashed the crude market, not just rising tensions in the Persian Gulf increased again. From the Telegraph: A British oil tanker is sheltering off the coast of Saudi Arabia amid fears it will be seized by

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Daily iron ore price update (bust)

Spot prices crashed. Paper too. Steel is weakening again. The culprit was easy to find, via Reuters: Executives from eight steel firms representing 30% of China’s steel output, including China Baowu Group, HBIS Group, Jiangsu Shagang Group and Ansteel Group, gathered at the China Iron and Steel Association (CISA) on June 27 in Beijing, according

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Daily iron ore price update (pop)

Spot went pop. Paper too though there was more buying overnight. Steel is caput. We’ve overcooked it here and it is going to come undone, either now or soon. Supply is returning steadily and demand is not great. The charts: Clyde Russell does an about turn: Shipments from the two major exporters, Australia and Brazil,

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OPEC is drowning in a tide of US shale

by Chris Becker Last night saw oil prices suddenly drop nearly 4% despite a communique from OPEC/Russia that it intends to extend its production cuts, or about 1.2% of total global demand for another nine months to support the market. Why the divergence? The daily charts of Brent and WTI Crude show how the nascent

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Trade surplus hits another record high

The Australian Bureau of Statistics (ABS) today released trade data for the month of May, with Australia’s trade surplus surging to $5.7 billion: The below chart shows that Australia’s trade surplus is running at the highest level on record: Both exports (credits) and imports (debits) rose: In seasonally adjusted terms, goods and services credits rose

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Memo to ScoMo: The gas cartel is lying to you

Via the AFR comes The Cartel: Centre Alliance Senator Rex Patrick is pushing for modifications to the Australian Domestic Gas Security Mechanism to bring down gas – and therefore electricity – prices. He has pointed to chief competition regulator Rod Sims’ suggestion of $7 a gigajoule as a potential reference point, although argues the price

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Brazilian iron ore slowly rebounds

Via Reuters: Major supplier Brazil exported 29.40 million tonnes of iron ore in June, compared with 29.83 million tonnes in May and 35.29 million tonnes a year earlier, government data released on Monday showed. The chart: There is slow improvement here year on year: March -7.77mt April -7.54mt May -9.15mt June -5.91mt Once Brucutu is

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Gas cartel Goliath rages at Centre Alliance David

Professional cartelier, Santos, is back again today: Santos chief executive Kevin Gallagher has declared there are plenty of producers of gas competing to supply the east coast market, dismissing a “cartel” allegation by Centre Alliance’s Rex Patrick, who is negotiating for tougher controls on LNG exports in return for support for the Coalition’s tax cuts.

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Daily iron ore price update (irrational)

Spot prices firmed but ignored the fireworks in paper markets. Steel is still going nowhere, really. CISA output for early June jumped to all-time records. The charts: Reuters sums up the irrationality for me today: “While the Brucutu restart will help boost supply, shipping the additional volumes from Brazil to China could take about 45