Gareth Aird, head of Australian economics at CBA, has written a new note examining the outlook for Australian commodity prices in 2021. Aird sees commodity prices “remaining well supported in 2021” on the back of “momentum in the global economy”. This will keep Australia’s terms-of-trade elevated in 2021, thus supporting national income as mining profits
Iron ore prices traded flat yesterday. Paper markets were soft overnight. Rebar did better: Yesterday CISA released mid-Feb output data for major mills and it hit preposterous levels: This is a part of the early year build of steel inventory and will come down before long. Even so, it is clearly bullish for now. Even
The post-pandemic environment is deeply irrational. We’ve seen markets crash down and crash up. Autocracies charge into self-defeating abuse of all and sundry. Democracies give up entirely upon accountability. Riots at the Capitol. The “great reset” conspiracy theory. The normalisation of rape in the Australian Parliament House. Entire countries swept by death while others bunker
Late yesterday China released its 70-city house price index and it showed some refirming of prices for January with month-on-month prices at 0.3% and year-on-year at 3.9%: The number of cities registering gains swung back to positive with 40 versus 30 stable of falling: The price gains are still very much in lower-tier cities: There
Iron ore prices fell yesterday, February 24, 2021: The proximate trigger was the tightening of output restrictions in Tangshan as pollution levels surpassed healthy levels. In the past, these types of restrictions have proven bullish for iron ore if they triggered a rise in steel prices but we seem to be so over-heated here, with
More interesting ruminations from a slightly less bullish Goldman Sachs on how to hedge inflation. My own view is that gold is not working as it used to. Real rates have been pummelled but that has triggered a rush to BTC instead. I reckon that given this inflation pulse will be strongest in the US
The Australian Bureau of Statistics (ABS) has released preliminary trade data for the month of January, which revealed a goods trade surplus of $8.75 billion after a 9% fall in exports was offset by a 10% fall in imports: Exports of goods in January 2021 declined $3,047 million (-9%) to $32,126 million Imports of goods
Iron ore prices were firm overnight as paper rebounded with steel and dirt yesterday: The latest update for steel output levels in China via CISA are insane at 2.15mt per day: I expect output to fall as the year wears on, much like 2011, as China steadily applies the stimulus brakes. In a supply-constrained environment,
Iron ore prices fell on February 19th, 2021 as paper markets pulled back. Steel has not updated: The dynamic we see every year at this time is the building of the great steel pile. That is well underway: It will run for another three weeks yet so I expect to see it top out somewhere
As expected, and as usually happens, following Chinese New Year, steel mills returned refreshed and ready to buy. That said, it’s not always quite so tearaway with everything going bonkers the moment markets reopened. We spent most of the day at or near limit up: I expect firm prices through iron ore markets through the
The recent Chinese trade war on itself via Australia has contributed to tremendous rises in the iron ore price. If it needed any further convincing, this has tipped the scale for the CCP’s long-held dream of creating a substantial African iron ore alternative.Departing Glencore chief executive Ivan Glasenberg, who knows a thing or two about
Yesterday we got a little shock from Fortescue. It came in the form of the resignation of three key executives associated with its Iron Bridge expansion: OK then. Not much to add. I can only observe that the focus on culture and behaviour seems a little out of step with the cost overrun crisis. There
I remain skeptical about the suddenly very fashionable commodities super-cycle thesis. Even more so as others lose their heads. Such as Chanticleer after yesterday’s BHP release: Mike Henry is a cautious type. [His] “fundamentally positive” outlook that could last as long as 30 years. He says two key drivers will underpin demand. The first is
Some more useful material from Global Mining Research: When you think of hydrogen, one of the things that we have at the back of our mind is the Hindenburg disaster, however the world has come a long way since 1937 (the Hindenburg was in fact supposed to use helium but there was a US export
Via Glynn Lawcock at UBS: ONE LINER NPAT miss but higher dividend a positive. KEY NUMBERS Underlying EBITDA of US$14,680m (+21% y/y) vs UBSe US$15,361m (Vuma cons US$14,689m). Underlying NPAT of US$6,036m (+16% y/y) vs UBSe US$6,640m (Vuma cons US$6,331m). Underlying EPS of US119.4cps (+16% y/y) vs UBSe US131cps (Vuma cons US125cps). DPS of US101.0cps
How high for the oil recovery is always an important question given its implications for inflation. At the moment, the oil market has returned to its usual bullishness with all sorts of analysts forecasting a new supercycle: For me, this is deja vu all over again. There is no doubt that the oil market has
Readers will know that the MB view is that the stronger this year’s global recovery, the quicker that China will tighten its most recent credit binge as its export sector booms. That clamping is already underway. The reason why is well known and understood. In its formative stages, super-charged catch-up growth in a developing economy
I am consistently surprised at how thin-sliced Wall Street analysis is. The new commodity supercycle meme that has taken hold in recent months is a great example. Late to the party but now on board is JPMorgan: It is generally agreed that over the past 100 years, there were 4 Commodity supercycles and that the
Global Mining Research has a nice primer on the emergence of green steel. Green Steel – Why is it relevant? The production of steel is one of the most polluting industries from a CO2 perspective, representing in the order of 8% of global emissions. For the miners ESG reporting has never been as relevant and for
Iron ore prices for February 10, 2021: Everything up again but iron ore more than steel and the result is smashed profits in China: This condition never lasts. Either steel prices will have to rise and they are struggling to do so. Or iron ore prices will have to fall. As we enter the Chinese
Iron ore prices for February 9, 2020: Everything up again. Have I made my sell the rallies call too early? Reuters reports that ex-China demand is rebounding: But, as Chinese credit shows today, the slowdown in China is being baked in now. It won’t arrive until H2 but it’s coming: As well, Chinese steel mills
Western Australia’s Department of Treasury has upgraded its forecast for the state’s 2020-21 Budget surplus to $3.1 billion, compared with expectations in December of just $2.2 billion. The state’s improved fiscal position has been driven by continued strong demand for iron ore, with Treasury forecasting that the price of the steel input will average US
Iron ore prices for February 8, 2020: Everything up. The AFR muses on China’s greening: Macquarie has modelled a scenario where China’s 7.7 per cent year-on-year production growth in December is sustained in the first quarter of 2021, then a trend slowdown of 1.5 per cent month on month takes hold through to the end
Since the great 2020 COVID-crash in markets, there has been an increasing siren song for a new supercycle in commodities. MB agreed with to this an extent given the cycle of extreme stimulus, led by the US Federal Reserve, which has set about debasing the US dollar. Such early cycle environments are always supportive of
Via Fitch: • Green Hydrogen Technology will lead the global hydrogen project pipeline, with 72GW of capacity in the various planning and development stages. Asia and North America and Western Europe (NAWE) will be the leading growth regions over the decade. • We expect to see a continued increase in the number of projects being
Iron ore prices for February 5, 2021: Spot down. Paper up. Still waiting on steel. Not much to report today so no change from me. I expect volatility around Chinese New Year then a firm bid for a few months and another goodly hit in May in another step down for the price range. Sell
Via Westpac’s excellent Robert Rennie: Back in November we introduced a simple iron ore port inventory model (specifically an inventory deviation model – see “Negative iron ore supply shocks waning“) that could be used as a useful indicator to point to where iron ore prices might settle down to if we saw signs that the
Iron ore prices for February 4, 2020: Spot and paper flew. Steel has not updated. CISA output for the last 10 days of January remains outrageous. In news, Vale’s Q4 production report was encouraging for supply: Vale’s iron ore fines production totalled 300.4 Mt in 2020, in line with 2019 as a result of (i)
Via Societe General: The recent Reddit silver rally was triggered by a post in a Reddit forum thread called WallStreetBets calling for “the biggest short squeeze in the world”. At the time of writing, silver prices have retreated and paused after the initial resulting surge. This note is not intended to offer a prediction of
Iron ore prices for February 3, 2021: Spot and paper firmed. Steel has not updated. • Our bulk shipping activity model points to 70mt of iron ore exports in January. That’s a fresh record for January exports and is up 3% versus a year ago. And when you take into account that several days of
