Commodities

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Daily iron ore price update (Confused? AFR won’t help)

The ferrous complex mixed onAugust 3, 2021 as spot firmed a touch, paper fell sharply overnight and steel was walloped again: The Dalian contract rolled forward which gives you some idea how steep is the backwardation. In news, it’s all about confusion, added to by the AFR: The Chinese government’s mixed messages on carbon emissions have sent

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Daily iron ore price update (limit down)

The ferrous complex was blasted lower on July 30, 2021 as spot was thrashed, paper was limit down, but steel firmed: The chart: The correction is happening for three reasons: Chinese regulatory clamps to slow steel output. Falling demand growth as Chinese property and infrastructure slow. Increasing global supply. There are have been three episodes

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Is the Lehman Brothers of iron ore going bust?

Evergrande appears to be going bust. It’s turning unruly and happening fast. Bloomie: China Evergrande Group’s crisis deepened after a court froze assets of its listed onshore subsidiary, spurring another selloff in its shares and bonds. The entire 20% stake in Shanghai-listed Langfang Development Co., held by the developer’s main onshore unit, was frozen from

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More Evergrande stress emerges

The doom loop continues for Evergrande: Two more companies said China Evergrande Group failed to pay its bills on time, adding to signs of a cash crunch at the world’s most indebted developer. Huaibei Mining Holdings Co Ltd. filed a lawsuit against Evergrande in Anhui province, alleging a unit of the company missed payments, according

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China mulls more steel curbs

China has been progressively tightening the noose around iron ore for months now. With some success given recent falls in iron ore prices. Measures so far have included: Releasing strategic reserves. Punishing speculators and limiting futures bidding. Constraining steel output which will lower iron ore imports so long as the curbs are wide enough to

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Lombard: Chinese greening to hammer iron ore, coals

TSLombard with the note. Last September, Xi Jinping surprised the world by announcing two ambitious climate goals: that China would reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060. Beyond the headline carbon objectives, the green initiative is an important domestic tool to bolster government efforts to centralize political power and allocate

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Chinese property developer Minsky moment intensifies

China’s Three Red Lines policy for deleveraging property developers has pushed the largest and most highly geared to the edge of extinction. Everngrande is fighting on, pulling every string that it can: At least two of Hong Kong’s biggest lenders are reconsidering halts on mortgages for China Evergrande Group’s unfinished properties, after the decisions were

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Daily iron ore price update (hammered)

The ferrous complex was half-hammered on Thursday 22, 2021 as iron ore gave way, paper kept falling overnight but steel jumped again: The same explanation is on offer from Reuters: Chinese iron ore futures fell for a fourth consecutive session, down more than 7% to their lowest levels in nearly three weeks, on prospects of

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Is the Bitcoin bubble inflating iron ore?

Check out this fantastical piece of speculation by Gordon Johnson of GLJ research: WHAT’S UP? While Evergrande’s bonds and equity trended up in the China Thursday trading session on news it resolved an issue with the bank that froze its accounts, this is PEANUTS in the grand scheme of things – while Evergrande has $107bn of B/S

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Coal booms as Japan kills it

Australian thermal coal has suddenly joined the ranks of crazed commodities. In the past two weeks it has literally gone vertical to prices unseen since pre-GFC: There are heats waves from Europe to China straining power grids triggering this price spike. It is also following the recent LNG price spike given the two energy sources

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Evergrande morphs into iron ore Lehman Brothers

Evergrande. Remember the name. The Chinese megadeveloper is rapidly morphing into some kind of Chinese ‘Lehman Brothers moment’. The Three Red Lines policy that is designed to deleverage large developers has triggered this latest round of crisis. Evergrande is preposterously leveraged with its equity worth less than 10% of enterprise value, owing to huge debts

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Vale readies iron ore deluge

Vale is out with its Q2 production report. According to Bloomie, it’s a disaster: The world’s second-largest iron producer churned out 75.7 million metric tons in the second quarter compared with the 78 million-ton average estimate among analysts tracked by Bloomberg. The result was still up from both the previous three months and the Covid-impacted year-ago period.

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Goldman’s commodities drivel

Another note from Goldman on the endless appeal of commodities: With the vaccine-shaped recovery well underway, markets have been pricing in expectations that US – and global – growth will peak this quarter. Alongside the surprise hawkish tilt in the Fed’s reaction function, this shift in growth outlook helped to partially unwind the reflation trade

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RIO to ramp iron ore output

RIO’s Q2 productio report: Pilbara operations produced 152.3 million tonnes (Rio Tinto share 126.9 million tonnes) in the first half of 2021, 5% lower than the first half of 2020 due to above average rainfall, shutdowns to enable replacement mines to be tied in, processing plant availability and cultural heritage management. Ongoing COVID 19 restrictions

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UBS: Iron ore to drop as glut emerges

UBS with the note: China steel mills restrictions could result in ~75Mt less iron ore demand in 2H… Press reports suggest China is imposing more restrictive measures on steel production in 2H21 to ensure output is lower y/y and to meet carbon emissions goal. MySteel reports Baowu is drafting its own plan to cut volumes