Courtesy of ANZ. ANZ Commodity Daily 687 210812
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Commodities daily
Primary Section
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Ore swaps bust the ton
Iron ore weakness continued yesterday: 12m swaps busted the ton. Here’s a long term chart: Sorry to harp on this, but swaps are rapidly approaching the 2010 low of $98.50 that marks the neckline on the giant post-GFC head and shoulders pattern. The news from China was also poor. From Reuters: An unexpected rebound in
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Yancoal cuts expansion plans
From the SMH: The chief executive of Yancoal Australia says coal prices are falling faster than miners can keep up, as the China-backed coalminer said it would halt expansion and seek broad cost cuts. Yancoal chief Murray Bailey told analysts today that the economy of Australia’s largest export market, China, had slowed markedly in relation
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Commodities daily
Courtesy of ANZ. ANZ Commodity Daily 686 200812 (1)
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Terms of trade shock developing
By David Llewellyn-Smith I know that at the moment it’s much more fashionable to celebrate the bubble in the Australian dollar than it is to point to weakening fundamentals, but the fact is our terms of trade are falling fast. The prime culprit remains iron ore, which late last week broke down again: And the
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Is the food spike finally hitting China?
Courtesy of Sober Look: China’s Ministry of Commerce blamed the increase in vegetable prices on “strong winds and rainfall in the country’s eastern regions” that “disrupted production and logistics.” Nevertheless vegetable prices are up 15.4% over the past four weeks. China Daily: – The wholesale prices of 18 types of vegetables in 36 cities rose
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Crude now at Euro record
Courtesy of Sober Look: Brent crude oil priced in euros hit a new high today of €94.83/barrel, exceeding the highs reached in 08 as well as early this year. Source: Bloomberg This rally has been driven by four factors: 1. The euro is down close to 15% over the past year. 2. Draghi’s “Believe me,
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Ken Henry’s RSPT haiku
Yesterday former Treasury Secretary Ken Henry appeared in the below ANU video at the AFR in which he complained about the state of public policy debate (no arguments there), celebrated the fiscal response to the GFC (no argument there, either, beyond the FHOG, which wasn’t Treasury’s idea), mentioned in passing the challenge of the Australian
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When it comes to Syria, China has no choice but to be pragmatic
By Michael Feller Reports last night that Beijing would receive an envoy of Syria’s Assad regime will no doubt rekindle Western commentary that China is supporting a fellow dictatorship in the vain hope that it can stem the tide of freedom and democratisation that is sweeping the Arab world. Yet the reality is a lot
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Ore melt goes on
After a few days of stability, the ore price slid again yesterday: And the charts: And Chinese steel prices: The recovery in Chinese bulk shipping indexes remains plateaued:
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Ore breaks lower
The ore price fell again yesterday: And as the chart shows, we are now well clear of the neckline on the head shoulder break, which now looks like upside resistance: For those that don’t think that this pattern is text book then this week’s RBA chart pack may convince: Notice the left hand chart with
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Rio pins its hopes on unconfirmed Chinese stimulus
There are some hopes that Chinese stimulus will work wonders. Rio Tinto, for instance, believes that the stimulus will support demand for their iron ore. Chief executive Tom Albanese said in today’searnings announcement: Although sentiment remains negative in Europe and the US recovery is still fragile, our order books are full and we expect Chinese GDP growth
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Diggers and Dealers downbeat?
Sounds like the annual Diggers and Dealers mining pow wow is a little more downbeat this year. From the AFR comes this quote from Neville Power, CEO of Fortescue: “We have not seen anything like the tight labour supply that was forecast,” he told media following a presentation at the Diggers & Dealers conference in Kalgoorlie.
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Ore bounces along the bottom
Iron ore remains impressively weak. In the past, when the price has fallen swiftly it has to rebound just as quickly. There is no sign of that so far in this round of weakness. Here’s yesterday’s prices: And charts: Chinese steel is still falling: And the coastal bulk shipping rallies have stalled for now: There is
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Coking coal crunched again
Friday saw a little more downward pressure on the iron ore price but coking coal was smacked for another 5% last week: Newc spot bounced last week adding 3.5% to USD85.65/t, while coking coal continued its decline falling 5.5% to USD182.27/t. Although prices at the premium end of the thermal coal spectrum gained ground, a succession of utility tender
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Macro Investor: Mining services whimpers
By Chris Becker Over the weekend, reports continued to emerge following BHP-Billiton’s (BHP) announcement of a large impairment charge on its US shale gas assets on Friday, that expansion plans in the Pilbara will be put on the backburner. CBA analysts first reacted by cutting earnings forecasts at BHP – but this already looked priced
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Ore still weak
Not a lot of movement in the ore complex yesterday but what there was was not encouraging with spot easing and swaps reversing to their lows:
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Dead cat borence?
The bounce in iron ore looks weak. Rather like a dead cat. Here’s yesterday’s moves: And the charts. No change to steel prices: But 12m iron swaps reversed substantially: Maybe a test of the low or straight through? The rally in China’s bulk shipping indexes is slowing too: The rally could be more short lived
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RBA commodity price index falls
The RBA commodity price index for July is out and shows a 2.4% fall for July: Preliminary estimates for July indicate that the index rose by 1.3 per cent (on a monthly average basis) in SDR terms, after rising by 0.3 per cent in June (revised). The largest contributors to the rise in July were
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ANZ cuts commodity price forecasts
Find below ANZ’s new commodity price forecasts, which include material downgrades to the iron ore complex. The ANZ team is excellent. Still, I can’t help feeling that an average price of $140 early next year is pretty bullish. ANZ Commodity Insight – Price Revision
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Ore bounces
My call for a short term bounce in iron ore is firming up. Overnight we saw positive moves across the complex: And to the charts. For steel: As well as ore itself: Looks like the head and shoulders pattern may miss, which is good news to say the least. Nonetheless, I would caution against hopes
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Ore breaks the neckline
Here’s your daily update ore prices. Not a lot of action yesterday but prices still fell on the spot market. In fact, they took out last year’s October low and the neckline on our scary head and shoulders pattern: The break is minor and may be bear trap but even so not encouraging. Neither is
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Coking coal crunched
Just when you thought it might be safe to wade back into bulk commodities, coking coal gets crunched. From the ANZ Commodity Daily: Newc spot added 1.5% to USD82.8/t last week in light, macro-driven trade, while coking coal tumbled 9.7% to USD192.9/t as producers offered significant discounts to attract buyers. Despite the price cuts, buying interest is reported
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Ore reaches the neckline
Here are Friday’s closing prices for iron ore: And the charts. First, Chinese steel: In short, prices fell again, despite rumours of monumental regional stimulus packages. There is clearly still fundamental weakness in the steel market. And for ore: The price of $116.20 is right on the neckline support of last year’s crash at $115.89
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Has ore found a bottom?
Here’s your morning ore update: So, 12 month swaps finally found a bit of support even if spot continued its descent through the neckline of its head and shoulders pattern. Given the hand-wringing that has suddenly seized the MSM over iron ore, one can’t help wondering if we’re not at the bottom here, at least