The ferrous complex tumbled on February 22, 2021: The big news is this: China is escalating its intervention into iron ore markets by reportedly setting up a single, state-backed platform for purchasing the bulk commodity in a move that could have far-reaching implications on Australia’s top export and its producers. Beijing is planning to make
The ferrous complex boomed anew on February 21, 2022: There are a couple of short-term bullish factors. Ukraine exports 35mt of iron ore that could at risk. WA is reopening and may have some staffing issues for a month as OMICRON infects all and sundry, though the open border and a resumption of FIFO should
The ferrous complex bounced on Friday 18 February 2022 after a brutal week of selling: There is nothing to suggest any improvement in fundamentals. Adjusted for LNY, steel demand and supply look very weak: Westpac’s Robert Rennie is onto it: “Many commodities have critically low inventories, but there’s no sign of that in iron ore
The ferrous complex was hammered again on February 17, 2022 as spot was hit, paper crashed overnight and steel is in retreat: The reasons are obvious: Chinese authority has asked some iron ore trading companies to release “excessively high” inventory and bring the stocks to reasonable levels as soon as possible, following a joint investigation
Another one bites the dust: Origin Energy has brought forward plans to close Australia’s largest coal-burning power station to 2025, seven years earlier than scheduled, as the rollout of clean energy across the country accelerates. The power and gas giant has handed in notice to authorities that it intends to shut down the 2880-megawatt Eraring
Fortescue’s half-year was an eye-popper: • Ongoing improvement in safety with the Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 December 2021, 14 per cent lower than 31 December 2020 • Strong operating performance across the supply chain contributed to record half year iron ore shipments of 93.1 million
The ferrous complex was smashed again on February 15, 2022: Bloomie has more: On Tuesday, some Chinese iron ore trading firms were summoned to a meeting with a trio of powerful government departments — including the markets regulator, the economic planning agency, and the securities regulator — to discuss “abnormal” prices. The companies were warned against
If you want to know what PM Scott Morrison is made of then you need only look at his record on the Australian gas sector. Recall this, via The Australian: Centre Alliance has received a written guarantee outlining the Morrison government’s gas policy, which the key minor party demanded in exchange for its support for
Goldman loves a good bubble: More: The opportunity to buy commodities has rarely been better. Unlike financial markets, physical market fundamentals are devoid of expectations and do not respond to macro talk. Future rate hikes of 50bps or even 100bps, designed to slow growth over a year from now, do not affect spot assets such
The ferrous complex was hammered again on February 14, 2022: I’m not sure why spot has disconnected from paper but that never lasts long. The bearish fact of the day is this: Excavators sales are an excellent leading indicator for steel demand. Iron ore is a speculative bubble. Fundamentals are equivalent to under $100 and
The ferrous complex was murdered on the evening of February 12, 2022 as the sentiment bubble shuddered: The cause we know: On Friday, the NDRC and the SAMR said they plan to send a working team to some commodity exchanges and major ports to conduct investigation into iron ore market. The team will focus on
The ferrous complex exploded on February 10, 2022 and the sky is now the limit: There are rare occasions in life, or there used to be, when the madness of crowds becomes a spectacle in and of itself. The ferrous complex is now entering one of those periods. As I have said for a few
There are signs that the global energy shock has peaked and is coming off. Let’s begin at the top with oil. The latest from the EIA short-term outlook: Brent crude oil spot prices averaged $87 per barrel (b) in January, a $12/b increase from December 2021. Crude oil prices have risen steadily since mid-2020 as
The energy debate in Australia remains paralytically stupid. Readers will recall the following: Gas exports via QLD skyrocketed local gas prices from 2014. Indeed local prices were pushed much higher than those in the export destinations of gas-poor north Asia. The price hikes from $2Gj to $20Gj cascaded through utility bills directly for gas and
The ferrous complex flamed out on February 9, 2021: Is this the end? There is nothing fundamental in these prices so it’s impossible to know. What we can say is that given it is mostly sentiment-driven, the bid may be vulnerable to attacks on sentiment, such as this: Iron ore futures slumped from a five-month
The ferrous complex was all over the place on February 2, 2022: I’m not going to pretend that I have any idea what is going on. On fundamentals, the price should be well below $100 and falling. I will note only that despite oodles of coal in China and everywhere else, and fading growth prospects,
The ferrous complex was in a state of hysterical bid on February 7, 2022 as everything melted up: There is no basis in fundamentals for this. Demand is shocking. Inventories enormous. Supply is abundant and the price surge already reopening mines. China is turning hostile to price action and seasonality will turn troublesome shortly. But
The ABS today released trade data for December, with the seasonally adjusted balance on goods and services surplus decreasing $1.4 billion to $8.36 billion: Goods and services credits (exports) rose $360 million (1%) to $45,320 million driven by a rise in exports of Metal ores and minerals. Goods and services debits (imports) also rose $1,761
Now, I know I’m the only one tracking reality with any regularity and markets have flown off with little birdies, but occasionally new data comes out that clearly underlines what is actually going on in Chinese property. Today that data is monthly new home sales in China: China’s property sales slump persisted in January with
Wall Street’s commodities bubble is going swimmingly. The latest bucket shop to push the new ‘supercycle’ is Morgan Stanley: Commodities outperformed equities in 2021, but only for the second time in a decade. It didn’t used to be like this: in half the years between 1970 and 2010, commodities beat equities. Given several tailwinds, we
Some days you just have to laugh. The ferrous complex went mad on January 28, 2022: Clearly, there was some whack blowoff going into the Lunar New Year holiday. Is there any actual support for it on the ground? The PMI was out yesterday and said nope. Here’s what it says about the critical end-user
UBS with the note: Supply risk rise as Omicron seeds in Western Australian resources sector In contrast to most other jurisdictions, WA’s pandemic response to date has been akin to an eradication strategy; the State has had very low COVID occurrence. Local media have reported an Omicron breakout at the Kemerton lithium hydroxide refinery near
The ferrous complex powered on January 27, 2022: Clyde Russell is useful today: Iron ore is enjoying a rally built largely on two factors that have yet to eventuate, a renewed building boom in China and possible supply disruptions in top exporter Australia. On the first, any Chinese rebound is, at this stage lacking any
The ferrous complex is reaching into the higher airs as the Ukraine bid charges the market: There is nothing to support this fundamentally, as we see in steel lagging. Chinese property continues to deteriorate: Property sales are terrible. Down 30% on the year along with starts. Funding for developers shows no turn at all: There
The ferrous complex flamed out on January 24, 2022: Not much to report beyond global market jitters. Chinese property is chewing through its problems: China’s efforts to spur asset sales by cash-strapped developers are starting to gain momentum with a flurry of deals involving state-run rivals, potentially easing the industry’s debt crisis. In recent days,
