Commodities

5

Stay short iron ore

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

6

Where is green steel at?

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

0

Daily iron ore price update (to the moon!)

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

5

Red-faced Goldman says catch commodities falling knife

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

0

Chinese infrastructure to the rescue of iron ore. Not

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

9

Daily iron ore price update (OMFG)

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

2

Goldman upsells commodity losses

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

0

Daily iron ore price update (GFC crash)

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

0

Coal boom already topping out?

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

4

China’s commodities revenge is at hand

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

4

Another bearish iron ore signal

#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

2

Energy is the new commodity bubble

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