Posts tagged 'Iron Ore'

When will I Cu again

Deutsche: yes, copper financing in China is big.

How big? Try a tenth of all short-term FX loans — and 750,000 or so tonnes of metal in Shanghai bonded warehouses alone — big.

But then, they think it will mostly stay profitable… Read more

An unusual bear market

We are, of course, talking about iron ore which has slipped into bear market territory overnight (defined here as 20 per cent fall from a recent high).

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The best laid plans of miners and men

It was supposed to be one of the best trades of 2013 – buy mining stocks to get leveraged upside to the global economic turnaround. But as we approach the end of the first quarter, only one half of that equation is working. The world economy is recovering strongly but the big miners are being well and truly left behind – Australian Financial Review.

Yep, the miners as a ‘leveraged play on global growth” is not going exactly to plan: Read more

BHP against the iron ore price

Here’s a cracking little story from Reuters on what seems to be BHP Billiton’s single-handed attempt to prop up the iron ore price this week.

As they reported on Thursday:

SINGAPORE, Jan 17 (Reuters) – BHP Billiton, the world’s No. 3 iron ore miner, bought 100,000 tonnes of the raw material on the spot market in a rare move that traders interpreted as a strategy by producers themselves to stem a decline in prices as Chinese demand thins. A rally that carried iron ore prices to 15-month highs last week was a boon for miners such as BHP , but took the market by surprise, scaring off buyers in top consumer China.

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Iron awe

Having tracked (with some glee) last year’s gut wrenching slide in the iron ore price…

… it’s high time we made a few observations on the recent dizzying ascent of the steel making commodity. Read more

Why iron ore prices are rebounding

After languishing well below $100 for much of August and September, spot iron ore is back in the $110+ range and not far from the $120 ‘floor’, albeit with a few hiccups of the last couple of days… So what’s going on? Here’s a theory we find plausible.  Read more

Would you rather be in steel or iron ore, right now?

It’s not a great choice, if you’re in China. From Reuters today is confirmation that Baosteel has suspended production at a Shanghai plant that has capacity to make 3m tonnes a year of steel.

“The government’s infrastructure investment may only improve sentiment … I don’t expect a big lift in steel demand,” Zhang Dianbo, assistant president of Baosteel, told reporters at an industry conference in Dalian on Thursday. Read more

It’s the FDI, stupid

When commentators cast around for reasons to explain the strength of the Australian dollar in the face of falling iron ore and coal prices they all arrive at the same answer - haven bond buying by central banks/ sovereign wealth funds. In fact, we’ve also made that very point.

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A dead cat splat?

About that iron ore rally…

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Australia counts its commodity price chickens

Forecasting is a tricky thing. The latest quarterly update from Australia’s Bureau of Resources and Energy Economics predicts iron ore prices will average A$101 a tonne in 2013:

Iron ore and coking coal price forecasts through 2013 - BREE  Read more

FoRescued Metals Group (updated)

Australia’s third biggest mining company has got some much needed breathing space from its lenders.

The new A$4.5bn lending facility extended by Credit Suisse and JP Morgan is secured! Read more

FoRescueQ Metals Group- updated

Trading halts are a feature of the Australian stock market in the way they aren’t in the UK, where they are rarely granted for companies on the official list. (Reverse takeovers are the main exceptions.)

That can be a positive but also a source of frustration. Read more

Charting the China slowdown…

From Martin Malone at Mint Partners…

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Is the iron ore panic over? – updated (with thoughts from a bull)

Behold, some wondrous news for iron ore producers across the globe.

From Business SpectatorRead more

The spent force in iron ore – redux

The rout in Fortescue Metals Group continues, even though the price of iron ore is holding steady around the A$87 mark.

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The spent force in iron ore?

We are, of course, talking about Fortescue Metals Group, the self-styled New Force in Iron Ore.

In spite of Tuesday’s cost cutting measures and Wednesday’s US$300m sale and leaseback of a power station, its share price has taken another shoeing. Read more

Are we approaching the edge of a steel cliff?

Has the pain really started for those suppliers for whom China’s steel mills are the big growth prospect? Iron ore prices have plunged in the last few weeks, but they are still at historically strong levels and well above those of 2009.

The breaking of the iron ore cost curve suggests that the marginal iron ore producers (who are mostly Chinese) have either dropped out or are making some kind of centrally-commanded loss. But the signs of steel downturn-related suffering outside of China are so far mostly limited to Vale’s ill-timed super-giant Valemax ships, and Fortescue Metals Group, with its combination of large debt burden and high breakeven point relative to its Australian peers. Read more

Fortescue and the Wile E. Coyote moment for the A$

And so Fortescue Metals Group, poster child for the Australian resources boom, has bowed to the inevitable and scaled back its heroic expansion plan.

Or as the heavily indebted company prefers to spin it; Takes decisive action on iron ore market volatility. Read more

What goes up…

… must come down.

What might the following index looked without the threat of war with Iran and/or the continued existence of the gold bug brigade? Read more

I’ve Got the Power/ Dumbest bloke in the world – 62 Fe edition

Yep, it’s time for our daily look at the ever-decreasing iron ore price and the goings on at Fortescue Metals Group, the self-styled ‘New Force in Iron Ore’.

We start with FMG and this amusing ditty from the Australian Financial ReviewRead more

In defence of the iron ore price floor (and Fortescue)

This comes via Charlie Aitken, one of Australia’s better known and certainly most vocal stockbrokers. He’s also an iron ore bull.

The note follows a meeting with Fortescue Metals Group and starts with iron ore and the spot market. (Emphasis throughout ours). Read more

Down down prices are down

Yep it’s the incredible shrinking iron ore price…

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Don’t look down (with Twiggy Forrest update)

Presenting the latest price action in… iron ore.

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DANGER – Trap door (updated)

Remember the joke about the $120 iron ore price floor?

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BHP’s Olympic Dam plans on hold

BHP Billiton is taking a step back from its planned $20bn expansion of its Olympic Dam copper and uranium mine — as many had suspected it might.

The company wrote down $346m on its investment so far in the South Australian project. That, combined with writedowns on its North American shale gas assets, led to a 21 per cent decline in its full-year profit after tax. Read more

Australia’s capex cliff

Here’s a bold call: the developed world’s fastest growing (that’s Australia for those of you at the back of the class) will fall in to recession next year as the China-driven mining investment boom ends.

Given the recent declines in Chinese steel prices and spot iron ore price, Deutsche Bank economist Adam Boyton reckons Australia’s terms of trade (the price of exportable goods divided by price of importable goods) could be 15 per cent lower year-on-year by the fourth quarter. Read more

Iron ore floor becomes iron ore trapdoor

Where will the new floor be? Iron ore is still falling below the $120/tonne mark…

Iron ore spot price - Reuters - August 22, 2012 Read more

BHP’s untimely dilemma: shrinking cash flows

As low cost producers, with arguably the best resources  in the world, it’s little wonder that BHP Billiton and Rio Tinto are shipping as much iron ore as they possible can from their mines in the desolate Pilbara region of Western Australia.  Assuming a $7/tonne freight rate, Lex estimates, the landed iron ore price in China would have to fall to $37/t before Rio lost out.

So even with the iron price at a near three-year low of $112 , Rio and to a lesser extent BHP are making a killing and will continue to do so as higher cost producers (mainly Chinese) fall by the way side. Read more

Still waiting for an iron ore price floor

We looked at both steel production and iron ore prices a few times last month, because it became clear that they were not adhering to the “$120/tonne price floor” theory that has been widely accepted for the past couple of years. And… they’re still not.

Nomura’s Matthew Cross and Ivan Lee have produced this chart to underline their argument that one should look to steel profits rather than the iron ore cost curve to predict near-term iron ore prices moves. Which we’d characterise as: it’s problematic to look only at the supply-side in forecasting commodities prices. Read more

The Aussie dollar – from South Pacific peso to Southern franc

It can’t be much fun being an Australian in London at the moment. (Trailing the Brits is one thing, but lagging the Kiwis in the medal table must really hurt.)

But at least our antipodean visitors can afford to indulge in a little retail therapy at Westfield Stratford City (the Australian dollar is trading close to a record high against the British pound) or, if they are really embarrassed, hop on the Eurostar to Paris (where the dollar hit a record high against the eurothingy just last week). Read more