Commodities

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Why “Pig Iron Scott” should boycott iron ore to China

Australia’s personality-disordered PM, Scott Morrison, is galavanting around the world drumming up support to contain China. He’s invited himself to the G7 to lace it with anti-CCP warnings. He’s dropped into Downing Street to spray Beijing. He’s soon off to the White House for an anti-CCP powwow. At home, more US marines and naval access

1

Chinese developer trouble deepens

Ever since China installed its “three red lines” policy early this year, there have been increasing signs of stress in China’s mega-development sector. Floor area starts have dropped sharply, equity markets have punished the sector and credit markets begun to tighten the noose on the more freewheeling names. That process continues today as Chin’s greatest

2

Daily iron ore price update (my bad)

The ferrous complex was well bid on June 11, 2021 for no reason that I can discern beyond my own posting. Spot was firm. Dalian paper jumped overnight. Steel has not updated: Dalian trading started weak yesterday until I posted on Vale’s latest dam troubles. Although it was not news, my reminding the market of

22

China to drop jackboot on coal prices?

Mwhahah. I have warned that China and commodities are a Mexican stand-off. Because China is the only market that matters in terms of volume for all dirt, it could in theory apply fixed prices and there is not a whole lot anybody could do about it. I have argued this is a risk for iron

11

Chinese mega-developers begin to crack

Lordy, already! A few months of three red lines policy and the titans totter. China’s largest property developer, Evergrande, is increasingly on the nose for credit markets: And equity markets: Regulators have instructed Evergrande counterparties to stress test their exposures. Evergrande denies any wrongdoing in its partly-owned Shengjing Bank Co, as well as heavy discounting

6

Commodities just another Wall Street bubble

When one sits around all day reading Wall Street research, patterns emerge. One is that professional managers very obviously read one another’s stuff and copy it. Another is that Wall Street likes to find a kernel of truth in some market, blow it out of all proportion, and inflate a bubble so it can front-run

10

China to “halve iron ore” use by 2030

Australia’s nemesis, The Global Times, is back today with more Australia bashing: #Australia has good reason to diversify its #ironore exports to #China ASAP. According to Rafael Suchan, CEO of Germany’s Scholz Recycling Group, China’s iron ore imports will be nearly halved by 2030 with the help of steel scrap #recycling. pic.twitter.com/X9mEJmoekD — Global Times

0

Chinese local governments set to storm debt markets?

Readers will recall that there has been something a mystery in some components of the very steep slowdown in Chinese debt issuance over the last four months. Most pointedly, local government borrowing, which accounts for a lot of infrastructure and property investment, cratered 80% year on year in the four months to April despite having

5

No more ghost cities for China

TS Lombard with the note After leading the recovery last year, real estate investment is set to decelerate under macro and sector-specific deleveraging campaigns as well as higher input costs. We expect property investment to reach 5% yoy in H2/21 from13% you in April. The slowdown will hit local government financing and investment. The combined

5

China’s stupid trade war delivers itself another shock

The China trade war on Australia is not going at all well. Iron ore is trading on a vast geopolitical premium. Damaged commodity trade flows have been redirected to other nations with a minimum of fuss. Australia’s current account surplus has skyrocketed to records. Based on outcomes so far, it’s the best thing to ever

2

Daily iron ore price update ($300)

The ferrous complex was much calmer on May 2, 2021 than in recent times. Spot hardly moved. Paper warmed a bit. Steel fell: In other news, Westpac reports on the rebound in Aussie volume after Q1: May Australian iron ore exports fell short of our expectations at just 75.7mt. That’s -1%yy and -4%3myy. Given recent

4

Lombard: China property bust imminent

TSLombard with the note: Property investment slump. Real estate investment is set to slow in H2/21 on tighter credit and higher input costs. Falling land sales will hit local government revenue and investment. Beijing will welcome a property FAI slowdown as officials battle to rebalance the economy and curb soaring China PPI. After leading the

14

Daily iron ore price update (absurd)

The ferrous complex took on the outlines of a circus yesterday as everything rallied. Spot was up. Paper up more overnight. Steel too: The trigger? This: Authorities had urged local long-process steel producers to cut production by 30%-50% in March to improve air quality, sparking supply concerns as the city accounts for more than 13%

1

Daily iron ore price update (PMI sag)

The ferrous complex is getting more and more volatile. I take this as a sign that we’re topping out given it appears to be a struggle between bulls and bears versus the former bulls only. Spot jumped. Paper went further overnight. Steel is lagging: Yesterday’s steel PMI was soft with output booming but new orders

28

China’s demographic doom arrives early

Demographics is destiny, they say. A young demographic bulge provides a strong tailwind for economic growth. An aging demographic bulge is an equally strong headwind. Alas for China it is increasingly the latter and more so than anybody previous thought: China has shifted to a three-child policy. COVID crushed its birth rate. This has brought

0

Daily iron ore price update (jawboning)

The ferrous complex firmed on Friday May 28, 2021 as Chinese policy pushed the market around like flies to wanton boys. Spot firmed. Paper and steel jumped. China is wrestling with itself. On Friday we had this to lift prices: China’s Ministry of Industry and Information Technology will seek to establish a mechanism to contain

6

Goldman: Buy commodities, China irrelevant

Because this time “it’s different”. Last night witnessed some aggressive rebounds in commodity prices thanks, in part, to a new Goldman note assuaging rising concerns for commodity prices emanating from the imminent Chinese slowdown. There are some days when Wall Street really does take the cake. Buy the China led dip. The bullish commodity thesis