Albert Edwards: Brace for huge deflationary shock

Spot on note from Albert Edwards at Societe General: Surveys suggest that inflation fears have become investors’ number one concern. But why look at it that way? We could equally say it is investors’ own bullishness on the strength of this economic cycle that is driving prices sharply higher in the most cyclically exposed equity


Daily iron ore price update (round trip)

The ferrous complex bifurcated yesterday as spot corrected lower after the day before’s price wackness. Paper shot up overnight with a broader dirt rally. Steel has not updated: A snippet from Capital Economics sums where we are at: The last few weeks of pump and dump have been a game of politicised speculation. The price


Gina Rinehart tops Australia’s soon to be a lot less rich list

As usual, Australian discussion around the political economy is more gawking than it is intelligence. One could never accuse the Rich List of being anything but the former. But this year, especially, its timing is ludicrous. The top two richest, and three of the top ten, are at imminent risk of immense wealth loss: Gina


China to cut off Australian iron ore “mid decade”

The arrogance emanating from Australian commentary about its iron ore shipments to China in recent times has been something to watch. There is a collective failure of imagination in the inability to envision the end of the trade. Yet that is what will come, in large part. Today Sinocism has some good advice: Julian Evans-Pritchard


Daily iron ore price update (slaughter)

The ferrous complex was slaughtered yesterday as Beijing ramps up its campaign to burst the commodity bubble. Spot iron ore was slammed. Paper held on overnight. Steel was flushed: China’s NDRC was forthright: The meeting pointed out that since the beginning of this year, the prices of some bulk commodities have continued to rise sharply,


Goldman: China to keep the pressure on property

The panic about commodity prices has reached a new level of silliness at Bloomberg this morning: Despite Beijing’s best efforts, asset bubbles are forming in China. Home prices are soaring, prompting officials to revive the idea of a national property tax. A surge in raw material prices spurred pledges to increase domestic supply, toughen market oversight, and crack


A global deflationary shock is building in China

Societe Generale with the note: The economic recovery in China continued in April but remained uneven. Growth in the industrial sector softened albeit at a still healthy pace, while services failed to strengthen further despite the containment of COVID-19. On the demand side, manufacturing and property investment quickened, but infrastructure investment slowed, probably due to


Nordea: The end of Oprahnomics

Another terrific note from Nordea: Finally, there was a pick-up in volatiliy. At least in the equity market. Bond and currency markets didn’t react much at all to the surprise surge in the US CPI “inflation” index. By the close of the week, the latter two markets (2y/5y/10y yields and the DXY index) had retraced


Is the iron ore peak in?

The ferrous complex pumped and dumped last week in a manner consistent with a blowoff top: Spot boomed then busted. Paper too. And steel: Steel output remains huge driven by catch-up growth: We may well see seasonal patterns impose themselves from here with price downside ahead through June. This is the construction weak season with


Daily iron ore price update (crash)

The ferrous complex crashed yesterday after an insane week of gains: The spot market was closed owing to a Singapore holiday but paper tells the tale. Rebar was belted as well. Is the peak in?  I have no idea. This is now purely a sentiment-driven market. China waved its hands frantically yesterday: China will monitor


Mapping iron ore’s doom

Yesterday Australia received some very, very big news. It wasn’t reported because it’s pretty scary. Goldman summed it up nicely: NBS released the key results of the 7th population census today. Overall population in China reached 1.412 billion in 2020, an average growth rate of 0.53% yoy from 2010 to 2020; in comparison with the


Daily iron ore price update (China census demographic doom)

The ferrous complex calmed down a little yesterday after Chinese regulatory intervention but oftentimes it takes more than one hammer to hit the iron ore nail so expect further moves. Spot eased. Paper firmed overnight. Steel waltzed straight through: In data new, Brazilian April exports were soft as expected, up only 7.5% over the year.


China drops jackboot on LNG, iron ore trade

Australia’s China divorce hits another milestone today. Following recent Morrison Government warmongering and ripping up VIC’s BRI deal, the blowback has arrived as the next commodity to be targeted is LNG: Two Chinese importers have been told to avoid Aussie LNG. China imported 29mt in  2020. About 10mt of that is above contract obligations. Recall


Iron ore firms as scrap deluge looms

Most markets are closed in China but iron ore spot is trading, up $3.20 to $189.65. In news, it’s all about scrap, via Platts: Ferrous scrap has decoupled from stronger iron ore prices so far in 2021, as low coking coal costs and strong steel demand in China and elsewhere support iron ore consumption at