The iron ore complex was distinctly weak on Friday March 19, 2021. Iron ore prices fell sharply. Paper markets fell just as far. Conversely, steel eased thought had a good weak offering some hope. CISA steel output fell back from its crazed pace in early March: At least rising steel and falling iron ore is
It is fascinating to watch macro analysts diverge into three distinct narratives covering the future of this business cycle. Conveniently for us, the three narratives are represented to three investment banks’ views. The first we might describe as “good news is bad news”. It’s captured by Bank of America which sees overwhelming US fiscal support
The ferrous complex was firm on March 18, 2021 with iron ore up a touch, paper more and steel holding gains: There’s not a lot of news but a few more indicators that we are somewhere near the top of this market. When your neighbour starts digging up the yard to ship it to China
The next cab off the rank for the Biden Administration is a giant infrastructure package. According to Morgan Stanley, Australia does not benefit much. MS estimates that only an additional 7.5mt of steel will be needed per annum. That’s mostly going to be covered by scrap with some small marginal lift in iron ore. The
Iron ore prices fell on March 17, 2021 though the market was generally stable: I remain of the view that the peak is effectively in. We will see firm pricing until May then drop sharply ina series of steps through the year. The newsflow is all about more supply. Vale is on track again: Vale
Iron ore rebounded on March 16, 2020. Paper stalled overnight. Steel fell: Nothing much new today. I am increasingly convinced that we’ve seen the peak in prices for this cycle now. The bid should be strong for another six weeks before the May slump but a range of factors are mitigating against further price rises
Jane Golley is one of those career China folks that never saw today’s tumult coming. As a result, she appears to confuse her career prospects with those of the Australian economy as we enter our post-China era. Via the ABC: What an amazing ABC News appearance by ANU China in the World chair Jane Golley.
Iron ore prices fell again on March 15, 2021 though paper was bid firmly overnight. Steel is holding: Chinese port inventories climbed last week to nearly 131mt tonnes: If this continues it will provide marginal price support but steel margins will have to keep improving for it to do so. The FT has some material
China’s growth numbers were out yesterday afternoon and were very interesting indeed for the commodity analyst. The headline numbers looked out of this world on base effects, even year-to-date numbers. Fixed asset investment was up 35%. Industrial production up 35.1% and retail sales up 33.8%: However, these numbers are going to tumble all year as
As we’ve said since the Chinese trade war on itself began, commodities are fungible and will always find a home. Aussie barley, one the most prominent exports hit by Chinese tariffs on itself, has boomed worldwide, especially in the Middle East. Via Bloomie: Australian farmers have taken a dominant market share in Saudi Arabia for
I have noted many times how hysterical markets have become in the last year. The Amphetamine Cycle, as I’ve labelled it, has proceeded through a decade of typical market phases in one year. An economic shock. Market crash. Massive stimulus. Market crash up. Inventory cycle. US dollar boom then crash. Gold boom and bust. Tech
The iron ore price fell sharply on Friday 12, 2021. Both spot and paper markets were hit hard and the latter kept falling overnight. Steel held up: So, some margin repair for Chinese steel mills last week which, ironically, will help prevent a collapse in the iron ore price if it supports steel output. In
Iron ore prices for March 11, 2021, followed the global pattern of rebounding prices as DXY and yields consolidate recent gains. Spot and paper were up strongly. Steel has not updated: I still expect strong prices through April so this is no surprise. But, I also still think that this is now a “sell the
Iron ore prices lifted yesterday as the clubbing of the day before faded. Spot was up. Paper too. Steel has not updated: But, the damage is done and fear is abroad. Global Times: “Steel firms in Tangshan city started to control output at the end of February as part of the sector’s anti-pollution measures based
When iron ore prices are so high, this is what can happen. Yesterday Dalian futures were crushed 10% limit down with some minor repair overnight. Spot was crushed as well as steel held up OK: The proximate trigger was three days of further output shutdowns at Tangshan steel mills to combat pollution. But that’s only
The iron ore complex sank on March 8, 2020 as a rising US dollar put a sizable dent in global reflation trades that include metals: Chinese steel inventories are now peaking in their CNY rebuild. It looks like we will top out at the second-highest ever around 37mt: Which is not necessarily immediately bearish. It
Iron ore fell on March 5, 2021 along with the broader ferrous complex. The global market rebound did nothing to restore it: Yet signals are still bullish. CISA output is completely insane: Yet the Luna New Year inventory rebuild is pretty modest: I would normally say that this is all bullish. But, mill margins are
Iron ore prices fell on March 4, 2021 as the global headwinds of rising yields came to bear. A rising US dollar often hits iron ore these days: Not much else to report today. While global yields and the US dollar rise, iron ore will struggle.
The commodity boom continues to rain riches down on Australia with Australia’s trade surplus soaring to a new record high $10.1 billion after increasing by $3.0 billion in January, according to the Australian Bureau of Statistics. The increase in Australia’s trade surplus was driven by a strong lift in exports, which rose $2.3 billion in
Iron ore prices firmed overnight as the ferrous complex warmed into global reflation. Steel prices surged giving steel mills some margin but they will need to keep raw materials purchases contained or it will all be gobbled up by the miners: The steel surge is global as demand is clearly outstripping supply for now. China
Iron ore prices for February 2, 2021 saw Tianjin spot rise alongside Chinese steel markets. Overnight Dalian futures fell: Chinese port stocks of iron ore are rising again: I would normally see the rise in Chinese iron ore inventories as bullish for prices. It probably is for a few months yet. But, with steel profits
The Reserve Bank of Australia (RBA) has released its index of commodity prices for the month of February, which continues to boom. The commodity price index rose by 3.6% in February in Special Drawing Rights (SDR) terms – the key determinant of Australia’s terms-of-trade – to be up 19.6% over the quarter and 23.9% year-on-year.
Iron ore prices for March 1st, 2020 fell across the complex as weak Chinese PMIs weighed: The steel PMI was out and rebounded: New orders are clearly trending down despite a better month. Steel Orbis has more: I still expect strong pricing for a few more months. But remember that the Chinese credit impulse peaked
Imran Kahn, Javed Miandad, Wasin the Wrecker, the Rawalpindi Express. Australians are used to looking to Pakistan for fine cricketers and tearaway pace bowlers. What we are not used to is Pakistan showing us the way on how to manage commodities. Yet that is exactly what Australia’s relentlessly gouged large-scale gas consumers need to do
One can view Australia’s economic relationship with China as evolving in two distinct phases. The first phase transpired from 2003 to 2011 and focused mostly on commodity exports. The second phase began as the first went bust and activity shifted to services exports, people flows and investment. With that second wave came unwanted influences such
It was a good time if not a long time. Nordea: Markets almost never cease to amaze. Just as we had written at ext pondering the doomsday spiral between commodity prices and inflation fears, the fixed income market got spooked enough so as to start triggering unwinds of various reflation trades. When the US10y yield
Iron ore prices for February 26, 2021 finished at decade highs: Indeed the entire ferrous complex is at new highs with steel and futures up again overnight and despite the global ructions in bond markets. Expect strong pricing to continue for two months. For a bit of fun, I have redone the very long terms
For the past couple of months, I have been warning of three things. The first is that this business cycle is not like any other. It is on amphetamines, speeded up, on fast forward if you prefer. In one year we’ve had a growth shock, stock crash, massive stimulus, stock crash up and tech bubble,
Iron ore prices rallied yesterday and more particularly steel prices. Paper followed overnight: This appears to have been a delayed reaction to yesterday’s news of steel cuts in Tangshan which, as I noted, usually sends the ferrous complex higher. Any widening of steel mill margins is bullishh for iron ore. Good news is now good
Goldman is pumping this one like there is no tomorrow: The rally in oil prices has paused after Brent prices briefly reached the $65/bbl summer forecast we first set-out last August, on the realization that frigid US weather will only marginally tighten the global market and over concerns for a return of Iranian barrels. Despite
