Commodities

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Commodities daily

Find below commodities daily courtesy of ANZ. For extra spice I’ve thrown today’s bulks chart, which shows iron ore and 12 months swaps rolling over (blue and yellow). It will be interesting to see what the PROC versus Fed does to the price. Chinese steel prices have at least stopped falling for now (green and

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A psychological slowdown

Find below another interesting note from the ANZ commodities team about a recent trip to China. It has some good texture and decent analysis around short term developments around stimulus, even if it fails to address the now widely accepted conundrum that China faces vis-a-vis the shelf life of its fixed asset investment model. ANZ

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Chinese stimulus and iron ore

ANZ released an interesting note late yesterday on the prospects for a rebound in the iron ore price in second half. The note is interesting on a couple of fronts. Firstly, there are some mixed messages coming out of the bank about China’s iron ore stockpile. Regular readers will recall a recent video with ANZ

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Mixed signals from the bulks

the news that China is not building apartments on the moon did not prevent a solid rally in iron ore spot and 12 month futures overnight. Both up almost 2% (white and yellow lines): However, as you can see, nobody actually in the Chinese steel markets seems to have gotten the AFR memo about imminent

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Take Chinese bulk defaults in your stride

The ANZ commodity team has a note out this morning suggesting that recent defaults by the Chinese in the bulk commodity space is nothing to be worried about. The note contains some interesting detail and is worth a quick read. However, the note also argues that the recent weakness is not some harbinger of doom

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Chinese defaulting on bulk contracts

The World Steel Association last night released April crude steel production statistics and news is mixed: World crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 128 million tonnes (Mt) in April 2012, an increase of 1.2% compared to April 2011. China’s crude steel production for April 2012 was

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Is iron ore swimming naked?

It’s not until the tide goes out that you know who’s been swimming naked, said Warren Buffet famously. Today a video by Reuters of ANZ Bank’s Nicholas Zhu sneaking into Qingdao port to examine enormous stockpiles of iron ore raises the discomforting notion that some large component of Australia’s export boom is shriveling in the

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Where does all of that iron ore go?

ANZ has produced a useful note on the outlook for iron ore. Regular readers will recognise plenty of conventional wisdom at work here, with the basic argument being that ongoing modest growth in Chinese demand and the cost curve for supply will support prices in the $120 to $160 range. That’s fair enough if more

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Are bulk commodities in a bear market?

If you’ve read MacroBusiness Morning, you’ll know that iron ore prices fell last night. In the past couple of weeks, the ore price has retraced modestly some 4.4% to $142.70. I’ve asked The Prince to give me a technical take on the bulks and the news is not all that great. First iron ore: There

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Shale gas hype: Subprime 2.0

The following is by Yves Smith and is cross-posted from Naked Capitalism. It has some important implications for Australia’s own gas boom, not all of them bad.  If my RSS reader is any guide, most of the press about shale gas has focused on two issues. First, shale gas is in considerable supply, cheap to produce, and

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RBA commodity prices up a tad in April

From the RBA this afternoon: Preliminary estimates for April indicate that the index fell by 1.6 per cent (on a monthly average basis) in SDR terms, after rising by 0.5 per cent in March (revised). The largest contributors to the fall in April were decreases in the prices of coal, oil, gold and aluminium. In

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Chart of the Day: nuclear power

Today’s chart comes from Reuters and shows the rapid deceleration in nuclear power generation in Japan as the aftermath of the Fukushima tragedy: For reference, here is worldwide electricity production, as reported by the World Nuclear Association, with the following stats: There are now over 440 commercial nuclear power reactors operating in 30 countries, with

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Ore hot, coal not

The twin pillars of Australia’s boom, iron ore and coking coal, continue to diverge. Yesterday the iron ore price broke more decisively out of its post crash trading range, up half a percent or so to $148.70. To say the least, this is a finger in the eye for China bears. Here is the spot

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Gas glut gloom

Two reports from The Cupboard today put a lot of gloom in the gas Futureboom! The most recent report has Woodside delaying a $40billion LNG plant near Broome, pushing the start date on production back to 2018, albeit because of an “aggressive timetable”: Woodside’s Petroleum’s request to delay a decision on a $40 billion LNG plant at

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The miracle commodity saves!

You are perhaps bemused that I follow the iron ore price with such regularity but to me it is bizarre that its price movements are not front page news every day. To be frank, you could scrap the business pages of every paper and simply print the iron ore price and you’d get a better

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Chart of the Day: pining for wine

I was going to post a more gruesome chart of the flash PMI’s from Europe last night, but Delusional Economics is writing a report on the result, so this chart from The Economist should take its place: It really is a two speed global economy with the USA, China and Russia expanding,  whilst in percentage

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Citi weighs in on commodity super cycle debate

Citi has joined the recent debate about whether the commodity super cycle is finished (or nearly so) with an argument in the affirmative. Bulls like to point to the fact that the apparent intensity of use for steel (in terms of kg per capita) for China is still well below some other countries at their peak. However,

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Commodity exports to the moon!

By Leith van Onselen The Bureau of Resources and Energy Economics (BREE) released its Resources and Energy Quarterly—March quarter 2012 (report below) yesterday, which provides a bullish outlook for Australian commodity exports. From the press release [my emphasis]: Australia’s resources and energy commodity export earnings are forecast to continue to grow over the medium term