UBS sees sharp drop in iron ore price

Original article by Lachlan Moffet Gray
The Australian – Page: 16 : 6-Apr-21

UBS expects a looming increase in global iron ore supply to result in the price of the steel input falling below $US100 per tonne in the December 2021 quarter. The iron price peaked at more than $US170 per tonne earlier in the year, but UBS says it is reaching an ‘inflection point’. The firm notes that iron ore shipments from Brazil are increasing, while inventories at Chinese ports are increasing. UBS has reduced its share price targets for Rio Tinto, BHP and Fortescue Metals Group; the firm has also downgraded its recommendation on the latter two from ‘buy’ to ‘neutral’.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, UBS HOLDINGS PTY LTD

Emerging Asia’s appetite for coal may be fading

Original article by Elouise Fowler
The Australian Financial Review – Page: 17 : 15-Jan-21

A report from the Global Energy Monitor on future demand for thermal coal in Asia may have implications for one of Australia’s biggest sources of export revenue. The report concludes that developing nations in the region may build just 25 gigawatts of new coal-fired power stations in 2021, compared with the 125GW that was planned five years ago. Australia’s thermal coal exports to developing countries in Asia have increased significantly in recent years, offsetting a decline in demand from traditional buyers in the region as they adopt net zero emission targets.

CORPORATES
GLOBAL ENERGY MONITOR

Directors warn of gradual recovery

Original article by Damon Kitney, Glenda Korporaal
The Australian – Page: 13 & 17 : 4-Jan-21

The Australian Institute of Company Directors’ final sentiment survey for 2020 revealed that 80 per cent of directors expect an increase in mergers and acquisitions over the coming year. BlueScope Steel, Fortescue and Dexus director Penny Bingham-Hall has told an AICD round table forum that there is a lot of overseas money looking to "find a home" at the moment, while Amcor and ANZ director Graeme Liebelt told the forum that there was a risk that business expectations might get ahead of reality in 2021.

CORPORATES
AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, BLUESCOPE STEEL LIMITED – ASX BSL, FORTESCUE METALS GROUP LIMITED – ASX FMG, DEXUS – ASX DXS, AMCOR LIMITED – ASX AMC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COLES GROUP LIMITED – ASX COL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SANTOS LIMITED – ASX STO

Iron ore seen supported near $US180 a tonne into January

Original article by Timothy Moore
The Australian Financial Review – Page: Online : 24-Dec-20

The spot price of iron ore fell by more than eight per cent in recent days, but Westpac is bullish about the outlook for the steel input in 2021. Justin Smirk of Westpac says iron ore inventories at Chinese ports remain at cyclical lows compared to steel production and imports, while the price of benchmark iron ore is trading at a significant premium to domestic Chinese iron ore. Westpac now expects iron ore to be fetching $US130 per tonne in March, compared with its previous forecast of $US105/tonne.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Iron ore to defy probe threat

Original article by Nick Evans
The Australian – Page: 13 & 19 : 16-Dec-20

Shares in Australia’s major iron producers retreated on 15 December in response to the China Iron & Steel Association’s call for regulatory intervention to address the rising iron ore price. However, resources analysts expect the iron ore price to remain high in the near-term, due to continued strong demand for steel in China. Lyndon Fagan of JP Morgan expects the benchmark price to average about $US140 a tonne in the March 2021 quarter and $US126 a tonne for the calendar year.

CORPORATES
JP MORGAN AUSTRALIA LIMITED

Vale fights to meet iron ore guidance

Original article by Brad Thompson
The Australian Financial Review – Page: 17 : 4-Jun-20

Macquarie Wealth Management’s analysis of port data shows that BHP, Rio Tinto and Fortescue Metals Group are on track to achieve their iron ore export guidance for 2020. However, Macquarie believes that Brazilian rival Vale will struggle to meet its full-year guidance of 310 million to 330 million tonnes, despite ramping up shipments in the last two weeks. Macquarie estimates that Vale will need to export more than six million tonnes per week to achieve the lower end of its guidance; its weekly shipments have averaged 4.5 million tonnes so far in the June quarter.

CORPORATES
BHP GROUP LIMITED – ASX BHP,RIO TINTO LIMITED – ASX RIO,FORTESCUE METALS GROUP LIMITED – ASX FMG,VALE SA,MACQUARIE WEALTH MANAGEMENT

Boom times back for iron ore

Original article by Nick Evans
The Australian – Page: 13 & 20 : 22-May-20

Adrian Prendergast of Morgans Financial says continued strong demand from China could see the iron ore price rise above $US120 a tonne. Reduced output by Brazilian iron ore group Vale is also likely to boost the price of the steel input; Prendergast notes that Vale’s shipments have totalled just 91 million tonnes so far in 2020, and it will have to ramp up production to meet its revised full-year guidance of 310 to 330 million tonnes. Meanwhile, Australian iron ore miners have downplayed the impact of China’s new rules for inspecting iron ore imports, stressing that they had been planned for some time and were implemented after extensive consultation.

CORPORATES
MORGANS FINANCIAL LIMITED, VALE SA, BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG

Full steel ahead for Fortescue as China draws down ore stockpiles

Original article by Brad Thompson
The Australian Financial Review – Page: 21 : 6-May-20

Fortescue Metals Group CEO Elizabeth Gaines expects demand for iron ore to remain strong due to China’s urbanisation policy. China produced 234.5 million tonnes of crude steel in the March quarter, which is 1.2 per cent higher than the same period in 2019. Gaines says that any additional economic stimulus in China would further boost demand for steel, and therefore iron ore. Meanwhile, Gaines is confident that Fortescue’s application to increase its export capacity at Port Hedland by 20 per cent will be approved.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG

Oil crash threatens to sink industry

Original article by Perry Williams
The Australian – Page: 13 & 20 : 23-Apr-20

Shares in Australian oil and gas producers were sold down on 22 April, as the global oil glut and falling demand continued to weigh on the crude oil price. The price of Brent crude oil reached a low of US15.98 a barrel, and Citigroup expects it to fall below $US10. The firm expects Brent to average $US17 a barrel during the June quarter. Coal-seam gas industry executive Richard Cottee says a significant production cut may be needed to boost the crude oil price.

CORPORATES
CITIGROUP PTY LTD

Airlines set for worst since GFC

Original article by Lucas Baird
The Australian Financial Review – Page: 19 : 27-Feb-20

CAPA-Centre for Aviation chairman Peter Harbison says the coronavirus will have a major impact on the global aviation sector if it is not contained quickly. He warns that if the virus outbreak becomes a pandemic, it will have the biggest impact on aviation since the global financial crisis. The International Air Transport Association estimates that the coronavirus will reduce the earnings of Asia-Pacific airlines by $US27.8bn in 2020.

CORPORATES
CAPA – CENTRE FOR AVIATION, INTERNATIONAL AIR TRANSPORT ASSOCIATION