Commodities

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Why iron ore is going back to $20

Via Argus: Higher pollutant emission standards for China’s steel industry continued to drive the country’s steel scrap usage for steel production higher in the first six months of this year. Chinese steel scrap consumption rose significantly, by 20.7pc on the year to 103.28mn t in January-June from 85.57mn t in the same period in 2018,

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What killed coking coal?

Via Wood Mackenzie: There has been an uneasy tension around hard coking coal (HCC) prices for some time. Few would argue that US$200/t prices for seaborne HCCs were sustainable. But at the same time, the market had become accustomed to sky-high prices, kept artificially strong while China focused on restructuring its steel and coal sectors.

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Daily iron ore price update (the thumpening)

Texture from Reuters: Benchmark Dalian iron ore futures slumped in morning trade on Wednesday, extending losses into a third session, after China’s top steelmaking city of Tangshan issued a second-level smog alert that requires mills to further limit operations. …The losses widened further after China outlined its annual anti-pollution plan for winter in a document

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CBA: Iron ore to hammer nominal GDP, Budget

Via CBA today: Australia’s key commodity prices to ease from here ■ We see Australia’s key commodity prices moving lower from here. ■ But despite lower commodity prices, Australia’s external sector should have another good year as export volumes continue to lift and the lower Australian dollar boosts our competitiveness. ■ An expected decline in

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RIO opens iron ore flood gates

Via RIO: Pilbara operations Third quarter production of 87.3 million tonnes (Rio Tinto share 72.2 million tonnes) was 6% higher than the same quarter of 2018 and 10% higher than the previous quarter. This reflects a solid performance in the mines, with actions progressing as planned. Our increased focus on waste material movement and pit

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Daily iron ore price update (steel output)

Texture from Reuters: Concerns about iron ore demand slowing in China, which makes about half of the world’s steel output, due to its renewed efforts to curb pollution by restricting steel mills operations in some areas also weighed on prices. Vale, the world’s top iron ore exporter and China’s major source of high-grade material, on

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Vale readies the iron ore flood

Via Vale: Rio de Janeiro, October 14th, 2019 – Vale S.A (“Vale”) iron ore fines production and sales had a significant increase in 3Q19, as a result of the continuous progress in the resumption of operations in the Southern and Southeastern Systems and also due to the strong operational performance and shipments normalization in the

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Daily iron ore price update (under pressure)

Texture from Reuters: Benchmark Dalian iron ore and coke futures slumped more than 2% in late trade on Monday following growing concerns about demand for the steelmaking raw materials, amid China’s renewed efforts to curb pollution by restricting steel mills operations. “Traders have been wary of the impact of ongoing restrictions on steel mills in

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Daily iron ore price update (Q2, 2020)

Texture from Reuters: “The combination of weak demand and relatively high supply is weighing on steel prices,” said Richard Lu, senior analyst at metals consultancy CRU in Beijing. Reports that China’s top steelmaking city of Tangshan has issued new anti-pollution restrictions on mill operations, effective from Oct. 10 up to Oct. 31, did not help

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Daily iron ore price update (Vale)

Texture from Argus: “Steel mills in Tangshan have received the notice and started shutting down production. These set of restrictions are even stricter than the September restrictions,” said the manager of a Tangshan-based mill. “Restrictions will support steel prices. Iron ore demand may not fall significantly as sintering has been under controls of varying extents

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Daily iron ore price update (unexpected)

Texture from Reuters: Steel inventories in China stood at 11.4 million tonnes as of Oct.7, up 594,100 tonnes compared with the week ended Sep. 26 but still the second lowest since late June, according to data from consultancy Mysteel. “Output curbs have eased after the National Day holiday, which piled pressures to (the) supply side,”

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Daily iron ore price update (return to Eden)

Texture from Reuters: Steel sales in China, however, have softened as growth in the machinery sector slowed, while the offset from infrastructure has not been sufficient, Westpac analysts said. “The Chinese administration clearly stated at the July Politburo economic meeting that property will not be used to boost growth this time so this significant part

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Iron ore’s scraptastrophe builds

Recently even BHP was bearish about it: BHP stopped short of saying exactly when China would hit peak steel, choosing to say that it was plateauing and would peak sometime in the 2019-2025 timeframe. One Belt One Road (OBOR) was seen contributing to 1% pa growth in Chinese steel demand while domestically demand is flat.

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Commodity price slump to hammer national income

The RBA has released its commodity price index for August, which dived another 2.7% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and by 3.5% in Australian dollar terms: Preliminary estimates for September indicate that the index decreased by 2.7 per cent (on a monthly average basis) in SDR terms,

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UBS: BHP very bearish iron ore

Via UBS’ Glynn Lawcock: BHP painted a not too rosy a picture for the global economy saying it thought the business cycle had peaked with autos and semi-conductors putting a big hole in Europe and Japan growth while China policy is only helping to offset but not add to growth. Essentially BHP pointed to weak

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Daily iron ore price update (PMI sick)

Texture from Reuters: China will “continue to implement a prudent monetary policy and increase the strength of counter-cyclical measures”, the central bank said in a statement on Sunday. expect more policy easing/stimulus measures, including medium-term lending facility rate and reserve requirement ratio cuts through the rest of this year to stabilise market sentiment and bolster

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Government cuts commodity price outlook but not enough

Via Office of the Chief Economist: Australian resource exports appear likely to hold up in 2019–20, in the face of volatile commodity markets. Our new projection of $282 billion in exports in 2019–20 has shaved just $3 billion from our June 2019 Resources and Energy Quarterly projection. Export earnings in 2020–21 have been revised down

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Daily iron ore price update (coke broke)

Texture from Reuters: “The rebound in the futures markets is just sentiment-driven,” a Shanghai-based trader said. “It’s very quiet now in the physical market because of the upcoming holiday.” Cities surrounding Beijing have imposed routine output curbs on steel mills, coking coal producers and other industries to improve air quality as the nation prepares to

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Calls for domestic gas reservation as western pipeline mooted

Via AFR: Federal Resources Minister Matthew Canavan is under pressure to consider a blanket cap on LNG exports from Queensland as activist groups, including The Australia Institute, argue the existing LNG export control policy is only entrenching high prices for east coast gas users. “Placing a cap on LNG exports would ensure that gas saved

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Daily iron ore price update (Waiting for Godot)

Texture from Reuters: Prices of seaborne thermal and coking coal in China have declined by around 30% year-on-year, mainly driven by reduced demand, said Helen Lau, metals and mining analyst at Argonaut Securities. China’s coking coal purchases, meanwhile, have been “quite strong”, surging 20% to 53 million tonnes in the first eight months of this

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China: No stimulus for you!

Via Bloomie: China isn’t in a rush to add massive monetary stimulus, in contrast with other central banks around the world, and must maintain a prudent policy stance, central bank Governor Yi Gang said. Overall financial risks are contained and those in the shadow banking sector and some key institutions have been resolved, said Yi,

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Daily iron ore price update (head and shoulders)

Texture from Reuters: Cities surrounding Beijing have imposed routine output curbs on steel mills, coking coal producers and other industries to improve air quality as the nation prepares to celebrate the 70th anniversary of the founding of the People’s Republic on Oct. 1. China’s northern regions are facing a sustained period of pollution for at

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Bulk commodity juniors punished

A few thing are beginning to break as bulk commodity alarms go off. The thermal and coking coal crashes have claimed Whitehaven: Goldman Sachs has cut its target price for Whitehaven Coal by 7 per cent after the coal miner’s inaugural investor day. The target price was cut to $2.70 a share from $2.90 a

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Daily iron ore price update (steel gusher)

Texture from Reuters: China steel futures rose on Monday, rebounding from a two-week low on falling inventory and fuelled by tightening output curbs in smog-prone cities pledged by the environment regulator ahead of the heating season. …Steel products’ stockpile in China dropped for the sixth week to 11.4 million tonnes in the week ended Sept.20

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Twiggy opens way to import Aussie gas to Australia

Recall this: EnergyAustralia, Australia’s third-largest energy retailer, on Wednesday agreed to buy gas from a liquefied natural gas (LNG)import terminal planned by a Japanese-backed joint venture, in the first of several deals needed for the project to go ahead. The Port Kembla LNG terminal is one of five proposed LNG import terminals that could help

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What Saudis can teach Australia about coal

Via Jacob Brown, Future Energy Leader – Institution of Chemical Engineers (IChemE) from  The World Economic Forum: On 18 May this year, Australia had the most surprising election upset in decades. The coal-supporting Liberal-National coalition wrenched victory from the jaws of defeat in what had been termed the ‘unloseable election‘ for the opposition. Against all

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Daily iron ore price update (jury is out)

Texture from Bloombergo: “Iron ore fell sharply on subdued demand,” said Commonwealth Bank of Australia analyst Vivek Dhar. Mills’ restocking ahead of China’s week-long national holiday that starts Oct. 1 is closing, and concerns over steel demand in the fourth quarter have caused margin volatility, he said. …As winter approaches, traders are also assessing the