The ferrous complex was smashed on August 31, 2021 as Chinese data tanked. Just as importantly the market took it at face value rather than seeing it as good news auguring more stimulus. Spot was hit and paper collapsed limit down: There’s not much more to add. I remain of the view that we are
The ferrous complex was mixed on August 30, 2021 as spot and paper fell but steel lifted (though that’s a week of price gains): In news, Andrew Forrest puts the boot into the bears by declaring he “wouldn’t bet against the iron ore price”. I’ll take that bet. Nothing has changed from last week when
The ferrous complex continued its huge counter-trend rally on August 27, 2021 as spot jumped and paper launched: This is still classic bear market action. Iron ore jumped with every other commodity on the something for everyone Powell speech. However, I still expect real steel demand to keep on falling ahead as Chinese construction slows
Stay short iron ore. Why? Nomura explains: Executive summary Beijing’s recent regulatory blitz on several sectors, including off-campus tutoring and internet platforms, has garnered investor attention. However, markets may have become so focused on the regulatory storm that they ignore the elephant in the room: Beijing’scurbs on the property sector, which makes up one-quarter of
The ferrous complex was mixed on May 26, 2021 as spot lifted but paper fell. Still waiting for steel: In news, the Baltic Dry is singing about booming supply: Momentum has been building in the spot market for capesize bulkers for the past week and on Monday it finally happened — average day rates crossed
The ferrous complex was firm again on August 25, 2021 as spot and paper lifted. Steel has not updated: CISA data for mid-August is out and gave us a decent rebound though still down year on year: This is to be expected emerging from seasonal weakness. However, I expect output volumes to remain materially below
TSLomberd with the note: We buy a basket of five ‘green steel’ stocks: ArcelorMittal, ThyssenKrupp, SSAB, Fortescueand Voestalpine (MT NA, TKA GR, SSABA SS, FMG AU, VOE AV), equally weighted at 20% each relative to selling the SPDR S&P Metals and Mining ETF. While the green steel movement is still nascent today–saddled with high initial
The ferrous complex launched on August 24, 2021 as the flushed out bottom of last week turned higher with gusto as expected. Spot and paper boomed. Steel has still not updated: From a contact, the action was all speculation: 09:55:30 The credit meeting. PBOC Governor Yi Gang hosted a meeting yesterday regarding monetary and credit
A red-faced Goldman says buy commodities. Because you haven’t lost enough money yet: Focus on the micro not the macro. For the past 9 months, commodities have been driven by strong macro trends, with significant cross-commodity correlations that pushed the entire complex higher through June. More recent macro trends –reflation unwind, Delta variant concerns and
The ferrous market continued to sink on August 23, 2021 as spot fell and paper kept going overnight. Steel has not been updated: There’s no respite for iron ore. Nor should there be. The glut means the price needs to fall to the highest marginal cost producer somewhere around $80, at best. The more interesting
The ferrous complex dead cat bounced on August 20, 2021 with spot and paper up. Steel has not updated. Westpac says it better than I can in a new note: Iron ore – are we there yet? Back in February we asked the question, “when will the iron ore prices fall below $130?”. At the
I keep saying it. Chinese infrastructure investment has a problem. Authorities have been trying half-heartedly since May to get local governments borrowing but they just won’t: The slow pace of borrowing by local governments in China and curbs on the property market mean the economy will receive less of a boost this year from infrastructure
No need to adjust your TV set. The following ferrous complex numbers for August 19, 2021 are correct. Spot collapsed. Paper recovered some poise overnight. Steel is being sucked into the vortex: We’re now down over $100 in a couple of months. Generally speaking, when we see a spot price collapse of this magnitude, it
The ferrous complex was very weak on August 18, 2021 with spot at new lows, paper falling further overnight and steel capitulating as well: BHP upset the applecart: Iron ore extended its rout as BHP Group warned it sees an increasing likelihood of “stern cuts” to China’s steel output this year. The prospect of much
The ferrous complex was weak again on August 17, 2021 as spot hit news lows, paper fell further overnight but steel bucked the trend: There’s not much else to report which is the problem. No China stimulus means we are going lower. In news of interest, there’s Ivan Glasenberg at the AFR: There are going
In mid-July Goldman raised its H2 forecast for average iron ore prices to $195/mt from $117/mt, saying it does not foresee a clear, sustained surplus in iron ore markets until 2023, and prices face a more gradual downward path than anticipated. Since then, iron ore has crashed 30% with no end in sight. Nearly all
The ferrous complex was mixed on August 16, 2021 as spot edged up, paper fell overnight and steel puked: The weak Chinese data was alarming for ferrous inputs. The slowdown underway in China is being led by construction and steel output: On the day, the ferrous market managed to make a play for bad news
The ferrous complex was mixed on August 13, 2021 as spot fell, paper firmed overnight and steel was stable: As interesting as these daily numbers are, the real story is elsewhere today. CISA released its steel output data for early August and it is stunning, crashing below comparable 2019 levels: Moreover, steel inventories climbed over
Mwahaha! UBS with the note: A drop of US$60/t or 25% in 3 weeks is impressive… the market seems concerned that China will force steel curtailments in 2H. There is another $60+/t to go… Iron ore prices are falling as China appears to be enforcing its target of steel production being flat y/y in 2021
Over the past few months, as iron ore has peaked and dropped, coal has gone the other way, providing some offset to Australia’s falling terms of trade. Thermal coal has been trading at a very high price near $170 and coking coal at high prices above $200. However, there are signs already that both booms
The ferrous complex was weak on August 12, 2021 as spot tumbled and paper was hit overnight. Steel has still not updated: A chart today from UBS gives us great insight into what is happening in Chinese steel demand: As you can see, both steel and iron ore inventories have been roughly stable in China
A noted earlier today, Chinese credit growth is slowing fast. Some interesting texture from Goldman: July TSF flow and new CNY loans both came in below expectations, after both indicators surprised to the upside in June. Sequential growth of TSF stock moderated to 9.3% mom annualized sa in July from 11.1% in June, and overall
The ferrous complex was mixed in reverse on August 11, 2021 as spot jumped, paper tanked overnight and steel has still not updated: Markets are still hopeful of further Chinese stimulus but the truth is the economy is slowing fast and credit even faster with new yuan loans falling away at an impressive clip: And
#China‘s major construction machinery firms sold 17,345 #excavators in Jul, lowest since Mar 2020, down 9.24% y/y, said China Construction Machinery Association. Domestic sales fell 24.1% y/y, down for 4th straight month and overseas sales rose 75.6%.https://t.co/vVS0O9qEIi pic.twitter.com/AZxfceWlCd — YUAN TALKS (@YuanTalks) August 11, 2021 As I have been saying, all that steel production cuts
The ferrous complex was mixed on August 10, 2021 as spot was clobbered and paper jumped. Steel has not been updated: Global miners dodged a short-term bullet yesterday when the spot price did not fall. Now today’s catch-up tumble will be offset by the jump in paper. Still, what does it matter? The market is
The ferrous complex entered the coconuts phase on August 9, 2021 as spot was stable, paper crashed and steel fell: Why spot didn’t fall when Dalian was murdered is anybody’s guess. Usually when this happens there’s catch-up the next day. Every five years or so I have to write this same post. This is the
Iron ore is down by one quarter. Oil is falling. Base metals are rolling. Australia’s terms of trade have topped and are falling as expected. Chart from Goldman on the commodity basket currencies: However, things could be worse. In the last few weeks, COVID has delivered the world a new commodity bubble in energy, preventing
The ferrous complex was mixed again on August 6, 2021 as spot firmed but paper was blasted overnight. Steel was firm: The facts are now plain to see. Chinese demand is falling away as the demand stimulus “pig in the python” is pooped out. This stall is being transferred directly and swiftly to steel output
The ferrous complex crashed on August 5, 2021 as spot stepped through an open trap door, paper did a bit better and steel was just fine: The chart: Now that the iron ore correction is decisively confirmed, we must ask just how fast is this baby going to drop? The global cost curve pretty much
Has anybody else noticed how nobody is talking about a “commodity supercycle” anymore? There is a good reason for this. A commodity supercrash has begun instead. According to bulls for much of the past six months, an endless delight of commodity super prices was ahead. Everything from oil to iron ore was going stay higher
