Commodities

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Thermal coal crash deepens

The thermal coal crash driven by falling Chinese imports just keeps getting deeper, via the AFR: Billions of dollars worth of Australian coal projects are under threat as slumping prices render about 19 per cent of the world’s existing seaborne thermal coal supply loss-making. Adani’s Carmichael and Whitehaven’s Vickery mine projects were lucrative proposals in

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Daily iron ore price update (noise not signal)

Texture from Reuters: “The continued recovery from recent (supply) disruptions in Australia and Brazil showed in stronger iron ore imports,” an ANZ Research note said. China increased its iron ore imports in anticipation of stockpiling ahead of China’s National Day holidays in early October, it added. But the price volatility reflected lingering concerns about demand

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Daily iron ore price update (roll over)

Texture via Reuters: “Steel mills across China are ramping up their steel production as Tangshan sintering cuts kick in. This means firm demand for iron ore in the ferrous complex,” said Darren Toh, a data scientist with Singapore-based steel and iron ore analytics firm Tivlon Technologies. “The rebound in prices recently echoed robust demand in

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S11D booms

More iron ore: Exports from Brazilian mining giant Vale’s flagship S11D Carajás iron ore operation in the first eight months were worth US$2.92bn, up from  US$2.87bn in all 2018 Exports hit US$1.74bn in January-August 2018. Vale exported 44.7Mt of iron ore from the complex (pictured) in northern Pará state in January-August. The figure is up from 36.7Mt during the

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Daily iron ore price update (stimulus)

Texture from Sinocism on new stimulus measures: More policy support for the economy coming, certainly not like the flood-like stimulus of previous downturns, but drips of stimulus continue to dribble out. China to take targeted measures for steady economic growth – Xinhua Further steps will be taken to ensure the stability of employment, the financial

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Trade surplus retraces from record high

The Australian Bureau of Statistics (ABS) today released trade data for the month of July, with Australia’s trade surplus retracing to $7.3 billion from $8.0 billion in June: The next chart shows that Australia’s trade surplus is still running near record highs: In July, exports (credits) and imports (debits) both rose: In seasonally adjusted terms,

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China builds Iranian oil gusher

Via the Petroleum Economist: Iran’s foreign minister Mohammad Zarif paid a visit to his Chinese counterpart Wang Li at the end of August to present a road map for the China-Iran comprehensive strategic partnership, signed in 2016. The updated agreement echoes many of the points contained in previous China-Iran accords, and already in the public

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Daily iron ore price update (boom, baby, boom)

Texture from Reuters: “Overall production curbs in Tangshan in September are on par with August, which are loose,” Huatai Futures said in a note, adding that output restrictions in Wuan, county-level city of the second-biggest steelmaking city of Handan, tightened slightly this month compared with August. “We believe that Chinese demand has further room to

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Daily iron ore price update (flame out)

Texture from Reuters: China’s biggest steelmaking city of Tangshan will carry out output restrictions on industrial firms for September and early October, to further strengthen improvement of its air quality, state media reported on Tuesday. More than 30 steel mills in Tangshan have been asked to cut operations throughout the month. From Sept. 1 to

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Australia’s terms-of-trade enjoys one last hurrah

Within today’s dump of balance of payments data that feeds into tomorrow’s June quarter national accounts release was the important news that Australia’s terms-of-trade rose another 1.5% in seasonally adjusted terms and by 2.2% in trends terms: Over the year, the terms-of-trade rose by 8.9% in seasonally adjusted terms and by 8.8% in trend terms.

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Commodity price index takes a dive

The RBA has released its commodity price index for August, which dived by 6.5% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and by 4.2% in Australian dollar terms: Preliminary estimates for August indicate that the index decreased by 6.5 per cent (on a monthly average basis) in SDR terms,

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Daily iron ore price update (dead cat screamer)

Bloomie has the trigger for the fun: China will maintain “reasonably ample” liquidity and “reasonable growth” in aggregate financing as it implements a prudent monetary policy, the State Council’s financial stability and development committee says at a conference chaired by Vice Premier Liu He. Various risks are “controllable” overall as the economy is stable and

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Daily iron ore price update (stimulus fever!)

Texture from Reuters: The glut and tepid demand for steel in top producer China have dragged prices of the construction and manufacturing material lower, putting strain on the profitability of mills. “We heard some of them are already making losses,” said Richard Lu, senior analyst at metals consultancy CRU Group’s Beijing office. “They have decided

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Daily iron ore price update (the crashening)

Texture from Reuters: There is still “a degree of scepticism regarding the likelihood of any concrete near-term progress” in the U.S.-China trade talks, ANZ Research said. The downbeat outlook for steel demand, along with anti-pollution production curbs in China, dragged prices of steelmaking raw materials lower, including iron ore. “Coupled with the slowing steel market,

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Are Fortescue dividends sustainable? Lol

Financial markets are really just large bucket shops so you can always predict what is coming at certain points of the cycle. For mining, the cycle peak is always marked by the “dividends are sustainable” pitch, via AFR: Fortescue Metals’ dividend policy is “definitely sustainable” says chief executive Elizabeth Gaines as the iron ore miner

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Daily iron ore price update (The pulverisening)

Texture from the FT: “Headwinds to Chinese demand are growing, with industrial output growth the weakest since 2002 and infrastructure investment growth weakening,” analysts at Numis wrote in a note. “Iron ore inventories are rising and mills’ profit margins are under pressure as falling steel prices wipe out the benefit of the drop in raw

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Adani rocked by contractor walkout

Via The Australian: Adani has been blindsided after a major contractor to its north Queensland coal port decided to walk away after a longstanding relationship. …In a statement last night, ­Aurecon said it would cease working with Adani when its current contact expired in “six to nine months”. “As part of this decision the firm

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Daily iron ore price update (downside break)

Texture from Reuters: “Despite the steel production restrictions in China, I think demand for iron ore, particularly for high-grade materials, is still at a healthy level,” the trader said. While the U.S.-Sino trade dispute has dampened global economic growth, it has not yet affected Chinese demand for BHP Group’s iron ore, Chief Executive Andrew Mackenzie

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Buy the dip on BHP?

Some amusing analysis here for you with BHP’s new result. It missed consensus profits above $10bn pretty badly:   But that’s history. Looking forward is much more concerning. It’s all about iron ore and coking coal, the two major drivers of returns: Here’s the realised prices: My outlooks for CY2020 are $50 (FOB) for iron

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Daily iron ore price update (palliative care)

Texture from Reuters: Iron ore pulled back during afternoon trade amid market talk that China’s top steelmaking city of Tangshan has ordered deeper production cuts over a four-day period – Aug. 18-Aug. 21 – to curb pollution. Reuters could not immediately verify this. Expectations that iron ore supply will further improve also weighed on prices.

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Daily iron ore price update (Vale again)

Texture from Reuters: Brazil’s Vale SA, the world’s largest iron ore exporter, said it had to temporarily halt operations at the Viga concentration plant that is part of its newly-acquired Ferrous Resources do Brasil due to a permit problem, impacting some 330,000 tonnes of iron ore production a month. But it said the suspension would

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Daily iron ore price update (stimulus hopium)

Texture from Reuters: Shanghai steel futures managed to push higher on Wednesday despite unexpectedly weak Chinese economic data for July, including a marked slowdown in industrial output growth amid a protracted U.S.-Sino trade war. “Investors took a glass half full approach to the weak economic data in China, with expectations of extra stimulus measures rising,”