Adani rocked by contractor walkout

Via The Australian: Adani has been blindsided after a major contractor to its north Queensland coal port decided to walk away after a longstanding relationship. …In a statement last night, ­Aurecon said it would cease working with Adani when its current contact expired in “six to nine months”. “As part of this decision the firm


Daily iron ore price update (downside break)

Texture from Reuters: “Despite the steel production restrictions in China, I think demand for iron ore, particularly for high-grade materials, is still at a healthy level,” the trader said. While the U.S.-Sino trade dispute has dampened global economic growth, it has not yet affected Chinese demand for BHP Group’s iron ore, Chief Executive Andrew Mackenzie


Buy the dip on BHP?

Some amusing analysis here for you with BHP’s new result. It missed consensus profits above $10bn pretty badly:   But that’s history. Looking forward is much more concerning. It’s all about iron ore and coking coal, the two major drivers of returns: Here’s the realised prices: My outlooks for CY2020 are $50 (FOB) for iron


Daily iron ore price update (palliative care)

Texture from Reuters: Iron ore pulled back during afternoon trade amid market talk that China’s top steelmaking city of Tangshan has ordered deeper production cuts over a four-day period – Aug. 18-Aug. 21 – to curb pollution. Reuters could not immediately verify this. Expectations that iron ore supply will further improve also weighed on prices.


Daily iron ore price update (Vale again)

Texture from Reuters: Brazil’s Vale SA, the world’s largest iron ore exporter, said it had to temporarily halt operations at the Viga concentration plant that is part of its newly-acquired Ferrous Resources do Brasil due to a permit problem, impacting some 330,000 tonnes of iron ore production a month. But it said the suspension would


Daily iron ore price update (stimulus hopium)

Texture from Reuters: Shanghai steel futures managed to push higher on Wednesday despite unexpectedly weak Chinese economic data for July, including a marked slowdown in industrial output growth amid a protracted U.S.-Sino trade war. “Investors took a glass half full approach to the weak economic data in China, with expectations of extra stimulus measures rising,”


Daily iron ore price update (dead cat)

Texture from the AFR: Australia supplied a record 74 per cent of China’s imported iron ore in June, according to trade figures, almost double the monthly average from 10 years ago. As the world’s largest manufacturer and second biggest economy, China is also reliant on Australian coal and uranium to keep the lights on and


Daily iron ore price update (the smashening)

Texture from Argus: Negative margins have forced Chinese steelmakers to cut output by more than 1mn t in August, sending domestic prices higher today. More than 30 mills in Shandong, Shaanxi, Shanxi, Gansu, Sichuan and Fujian have announced maintenance shutdowns that will cut production by at least 1.15mn t of output in August, equivalent to


Daily iron ore price update (ferrous glut)

Texture from Reuters: “Sentiment of traders has collapsed… People don’t know how much further the iron ore will go down and everyone is desperately getting rid of the goods they hold,” a Hebei-based iron ore trader said. …However, analysts expect that iron ore prices will find support soon, as demand at mills remain firm as


Daily iron ore price update (megacrash)

Texture from Reuters: The yuan depreciation will increase operating costs for Chinese importers, Richard Lu, senior analyst at metals consultancy CRU Group’s Beijing office said. “Steel mills will likely try to avoid buying iron ore at a weaker yuan level,” he added. “We have been cautious about iron ore for some time now and continue


Daily iron ore price update (up escalator, down lift)

Reuters has texture: “We remain marginally bullish in our overall assessment of supply,” said Hui Heng Tan, analyst at commodities broker Marex Spectron. “Spot supply availability continues to improve as mills remain in de-stocking mode and domestic production picks up.” The demand outlook for iron ore and other steelmaking materials is not encouraging. “Margins took


Daily iron ore price update (crashola)

Texture from Reuters: Worries about demand for steel products also weighed on iron ore, after U.S. President Donald Trump vowed to slap an additional 10% tariff on $300 billion of Chinese imports from Sept. 1. …Brazil’s iron ore exports rose 16.6% in July from the previous month to 34.3 million tonnes, the highest in nine


Brazil iron ore exports boom!

The market still hasn’t realised it but it’s over, via Reuters: Brazil’s iron ore exports rose 16.6% in July from the previous month to 34.3 million tonnes, the highest level in nine months, as Vale resumed production at its largest mine in the state of Minas Gerais, official data showed on Thursday. July’s exports were


Daily iron ore price update (time to die)

Reuters has the texture: Steel inventory in China stood at 12.6 million tonnes, as of July 26, the highest level in three months and 27% higher than the year-ago stockpile, said Argonaut Securities analyst Helen Lau. Steel production may remain brisk amid market talk that China’s top steelmaking city of Tangshan will extend but loosen


Vale on track for more ore

Via Vale’s fresh financials: • We made substantial progress in 2Q19 concerning the 93 Mtpy of Iron Ore production stopped in 1Q19 with the resumption of Brucutu operations on June 22nd , 2019, recovering 30 Mtpy of production capacity, and the partial return of dry processing at the Vargem Grande complex, adding about 12Mtpy (5


Daily iron ore price update (down, down)

Reuters has texture: Tangshan had stepped up anti-pollution measures over July 21 to 31 to meet its air quality targets, requiring some steel producers to curb their operations by up to 70%. Traders and analysts said there was talk that curbs would be extended beyond July, although the August restrictions may be less strict. The


Daily iron ore price update (restocking)

Texture from Reuters: Average weekly shipment from Brazil decreased 8% versus June to 5.9 million tonnes, while cargoes from Australia decreased 13% to 15 million tonnes, she said, citing some industry tracking data. “The data shows shipments are not recovering and not very stable,” Lau said. “We need to closely monitor these shipments on a


Asia “awash with Chinese steel”

Via Nikkei: Global crude steel output for the six months through June rose 4.9% on the year to an all-time high of 925.06 million tons, World Steel Association data released Friday shows. As China lifted infrastructure spending to shore up its economy, the country’s steel output grew 9.9% to 492.16 million tons, outpacing the global


China’s failing auto sector signals the great stagnation

Via the FT: China’s shrinking car market is hitting foreign manufacturing groups hard, with some companies operating at a fraction of their potential output, sparking fears a number will be forced to quit the world’s biggest market. Ford and Peugeot owner PSA have suffered the most, with their factories running well below full capacity at


Moody’s upgrades iron ore. Sell!

Here’s a useful contrarian indicator. The ratings agencies always come in too late on bulk commodities: » Tight iron ore supply fundamentals prompted us to revise our price-sensitivity ranges upward. Several events in Brazil and Australia have contributed to diminished supply of iron ore and we expect this situation to only slowly improve through 2019 and


Daily iron ore price update (fighting on)

Texture from Reuters: Any production limits for steel mills during winter will be set by local governments depending on their emissions, the environment ministry said on Friday. “Markets perceive provincial restrictions to be looser than federal ones, although that does not usually play out since we have seen provincial authorities as being equally as strict,”


Daily iron ore price update ($150!)

Texture from Reuters: Singapore-based steel and iron ore data analytics firm Tivlon Technologies is keeping its price forecast of $150 a ton by October. “We expect the launch of infrastructure projects in China to peak in the third quarter and further uplift demand for steel,” it said in a note. …China’s iron ore imports in


Daily iron ore price update (toast)

Reuters has texture: Coking coal inventory across ports in China stood at 5.73 million tonnes, as of July 19, up 36% from a year ago and 107% this year, she said, while news of renewed audits on anti-pollution measures by mills also weighed on coking coal. However, prices had stabilised, helped by a switch to