Commodities

1

USD driving metals rocket

Morgan Stanley is right today: Since mid-June, commodity price performances have been dominated by a currency trade. So what events could terminate this driver? Currencytrade, mostly: Over the last 8-10 weeks, ithas been increasingly difficult for us to identify the fundamental basis of the general lift in commodity prices (now >15-40% since mid-June). Yes, prices

25

Richo barks up the wrong power bill

Via a roundly climate change skeptical Richo: Malcolm Turnbull is running out of options as to what issue he might choose to fight the next election. This week he threw away what seemed to me to be his best option. By far the biggest issue in Australian politics today is electricity prices. Neither the Coalition

1

Daily iron ore price update (paper burn)

Iron ore price charts for August 29, 2017: Tianjin benchmark was down 40 cents to $76.10. Paper burned overnight, especially for coking coal. Steel has not updated. Paper is clearly falling faster than physical so the latter obviously has ongoing tightness. That said, if coking coal capitulates as its supply disruptions pass then the iron

19

North Korea shoots down ASX

Break! XJO has just seen its symmetrical triangle break down the wrong way. It’s taken out the 200DMA to boot: This clearly opens the way for lower. Thanks DPRK! This should still lead absolutely nowhere in terms of North Asian conflict. Japan and US have requested a UN Security Council meeting. But we’ve yet to

6

“Sleaze” Bank stock sinks with its reputation

Jonathon Tepper has a new name for the CBA: And investors are voting with their wallets, hitting new lows: The chart still suggests no support right down to $70 and with the politics getting worse who knows? The under-performance is worsening but the whole sector appears increasingly tarnished: Meanwhile today, Dalian has managed to ease

12

Coal still doomed

The new look US Department of Energy released a big report last week on the power industry. As a reminder this is the report commissioned by the new Secretary of Energy, Rick Perry, who seemed as if he had already written the conclusion that “coal was king” and was just looking for someone to come

1

Daily iron ore price update (bullish ports)

Tianjin benchmark was unchanged at $76.50. It feels toppy given paper has rallied more. The latter was slain Friday night. I couldn’t find any trigger so perhaps it’s just profit taking. The two coals are still very high. Chinese steel mill profitability is still insane despite the bulk rally. Port stocks fell another 1.75mt to

0

More on iron ore supply cuts

Via Macquarie:  Non-major iron ore slips on Indian summer: Iron ore numbers reveal a marked slump in nonmajor, seaborne supply as India remains largely out of the seaborne market. Despite a sharp uptick in prices during July, Chinese imports from non-major supply, a very price elastic segment of the market, fell to 10.3 Mt,

18

The Banana Republic prices itself out of…bananas

Lot’s of good material today on Australia’s great energy debacle. First, Thomas Parry foundation chairman of the Australian Energy Market Operator 2008-2015 does a great job of describing the history: Why is electricity in Australia now so expensive when not that long ago it was cheap? Following the UK privatisation model, Victoria – under a Liberal government

7

More on the sudden iron ore shortage

Via Credit Suisse: Iron ore supply deficit to China continues – steel demand accelerated. It is probably fair to say that almost every commodity analyst looking at the seaborne iron ore market over the last few years has calculated that the iron ore market is in over-supply and getting worse. But we have all been

1

Daily iron ore price update (still hot)

Iron ore price charts for August 23, 2017: Tianjin benchmark fell $1.40 to $77.40. Paper firmed overnight. Steel fell sharply. From Reuters: Steel and iron ore futures in China fell about 4 percent on Wednesday as a selloff in steel dragged down prices of the steelmaking raw material, cutting short a rally that lifted iron

8

Go commodities, but why?

by Chris Becker The always fun to read Tom Price from Morgan Stanley asks the question as commodities put in some great market performance as the USD (measured by the DXY dollar index) goes down the golden toilet: The technical reasons are all very similar, with copper here illustrative of a bullish rectangle pattern that

0

Four takes on BHP

First, the “buy” from Deutsche: New strategy and targets should result in significant re-rate BHP has reported a strong FY17 result with close to record FCF of US$12.6b driving net debt down to US$16.3b. Earnings were below our estimate on higher net interest. A revamped strategy with measurable targets was outlined which we applaud. BHP

5

Chinese steel in full blown boom

Macquarie’s excellent monthly steel mill sentiment survey leaves no room for doubt. Chinese steel is in a full blown boom:  Sentiment among players in the steel and iron ore industries remains very bullish this month, particularly on the steel side. The market is holding a positive outlook on steel prices based on the expectation

3

Daily iron ore price update (flame out)

Iron ore price charts for August 22, 2017: Tianjin benchmark rose 70 cents to $78.80. Coking coal futures are falling as the seaborne price is now more expensive than Chinese sourced. Futures were pounded overnight. Steel is near its highs. There’s a good chance we’re done here. Coking coal is unlikely to go higher and