Commodities

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Chinese yields herald falling earnings, commodities

From Bloomberg: Yields on 10-year Chinese government bonds have been a strong indicator of earnings-per-share for emerging-market companies over the last five years, and the recent decline suggests a deteriorating outlook, Morgan Stanley strategists including Graham Secker and Jonathan Garner wrote in a note to clients Friday. “What makes the move more disconcerting is that there has

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Stupid Atlas shareholders want more

Via The West: MinRes announced a $280 million, all-scrip bid for Atlas on Monday, which would give its shareholders one new MinRes share for every 571 Atlas shares they hold. The offer values Atlas about 3¢-a-share, representing a 59 per cent premium to its last traded price of 1.9¢ before the offer was announced.  Atlas’

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Daily iron ore price update (China slows)

Iron ore prices for April 11, 2018: Tianjin benchmark was down $1.65 to $64.20. Paper held on overnight. Coking coal futures are breaking. Steel is soft. China is slowing. It always begins in the PPI. Some more on that from Vertical Group: FIRST… THE “HARD DATA”. Last night, China released factory inflation numbers (i.e., PPI), which slowed for

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BREE still too bullish on commodities

The Office of the Chief Economist (formerly BREE) is out with its March QTR outlook. It’s up to its old tricks raising the outlook: Prices are not going remain so far above historical averages. Sorry. Iron ore is too high: As BREE itself notes, Chinese steel production has peaked and will fall from here (probably

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A postcard from China’s steel sector

Via UBS: Is demand OK given some weaker signals in 1Q18?  A key question was the strength of demand given weak PMIs in Feb-18 and large inventory builds through Feb+Mar-18.  We learned that demand had been held back through these months, reflecting:  A later spring festival than usual, where many firms and

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The crazy bid for Santos

Via the AFR: US private equity firm Harbour Energy has renewed its takeover tilt for Santos, lobbing a $13.5 billion cash takeover offer with a high enough price to get engagement from the board, but with foreign investment approvals still outstanding. The $6.50 a share proposal is the fourth from Harbour after two made in

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AEMO: Gas shortage not fixed

Via the AFR: Victoria will experience significant gas shortages within three years unless additional supply is brought online, which could have flow-on effects for the whole National Electricity Market, according to a new report by the Australian Energy Market Operator. The report – which mirrors similar concerns about NSW’s gas supplies and prompted Prime Minister Malcolm