BUSINESS FORECASTING

Citi predicts end of credit cards

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Original article by Karen Maley
The Australian Financial Review – Page: 1 & 4 : 30-Oct-17

Michael Corbat, the CEO of US bank Citigroup, forecasts that it will not be too long before digital payments and the like replace credit cards. Given that Citigroup is the largest issuer of credit cards in the world, it is important that it is well-positioned to be part of whatever replaces them. Asked whether he supports plans by the Trump administration to scale back some of the laws introduced in the wake of the global financial crisis, Corbat says it is the way the laws are administered that needs to change rather than the laws themselves.

CORPORATES
CITIGROUP INCORPORATED, SALOMON BROTHERS INCORPORATED, TRAVELLERS GROUP INCORPORATED

Fortescue adamant that wide iron ore discount will revert

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Original article by Tess Ingram
The Australian Financial Review – Page: 17 : 27-Oct-17

Fortescue Metals Group’s cash reserves rose from $US1.8bn to $US2.3bn in the September quarter. Iron ore shipments totalled 44 million tonnes, with "C1" costs falling marginally to $US12.15 per tonne. Fortescue has reduced its price realisation guidance for the second time in 2017-18, and now expects to receive between 70 and 75 per cent of the benchmark index price for its lower-grade ore. CEO Nev Power suggested earlier in 2017 that the price discount would not be sustained, but he now says it is difficult to predict when it will narrow.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, MACQUARIE GROUP LIMITED – ASX MQG

Chinese entrench iron ore discount

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Original article by Paul Garvey
The Australian – Page: 20 : 24-Oct-17

The price discount between iron ore with 62 per cent content and lower-grade ore has traditionally been within the range of 10-15 per cent, although it has widened significantly in 2017. Chris Salisbury, the head of Rio Tinto’s iron ore division, says China’s decision to curb steel production during winter should not affect demand for Rio’s higher-grade iron ore. He adds that this in turn will ensure that the price discount will be sustained. Salisbury also says the widening discount appears to be structural.

CORPORATES
RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, ATLAS IRON LIMITED – ASX AGO, UBS HOLDINGS PTY LTD, TAFE WESTERN AUSTRALIA

Renewables on the rise but world will still rely on coal

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Original article by Graham Lloyd
The Australian – Page: 2 : 19-Sep-17

The US Energy Information Administration has forecast 28 per cent growth in global energy consumption between 2015 and 2040. Its outlook report also shows that global production of coal will rise by three per cent over the 25-year period. Coal consumption is expected to fall in OECD nations and China, but this will be offset by an increase in countries such as India. The report concludes that fossil fuels will still account for more than 75 per cent of global energy consumption in 2040, although electric power generation via renewables is forecast to record the strongest growth over this period.

CORPORATES
UNITED STATES. DEPT OF ENERGY. ENERGY INFORMATION ADMINISTRATION, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Discounts on FMG’s iron ore forced higher

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Original article by Angus Grigg, Tess Ingram, James Thomson
The Australian Financial Review – Page: 15 : 18-Sep-17

The discount that Fortescue Metals Group receives on sales of its iron ore with 56.7 per cent iron content has widened so far in 2017-18. This discount to the benchmark price for 62 per cent iron ore averaged 23 per cent in 2016-17, compared with an historical average of 10-15 per cent. However, the discount widened to 27 per cent in the June 2017 quarter. It increased to 32 per cent in August and rose to 35 per cent in early September. Fortescue’s outgoing CEO Nev Power expects the current discount to be maintained in the near-term.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON ALUMINIUM (HOLDINGS) PTY LTD, RIO TINTO LIMITED – ASX RIO, VALE SA, UBS HOLDINGS PTY LTD, SHANGHAI STEELHOME INFORMATION TECHNOLOGY COMPANY LIMITED

Nickel miner pins hopes on electric cars

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Original article by Paul Garvey
The Australian – Page: 18 : 11-Sep-17

Australian-listed Independence Group is well-placed to benefit from rising demand for nickel, cobalt and copper as sales of electric vehicles rise. The company’s Nova mine produces all three metals, and Independence MD Peter Bradford says it has received a number of enquiries regarding supply deals when existing off-take arrangements with BHP Billiton and Glencore expire. Bradford notes that factors other than demand from the electric vehicle industry have prompted the recent rise in the price of nickel and copper.

CORPORATES
INDEPENDENCE GROUP NL – ASX IGO, BHP BILLITON LIMITED – ASX BHP, GLENCORE PLC, SIRIUS RESOURCES NL, PANORAMIC RESOURCES LIMITED – ASX PAN, MINCOR RESOURCES NL – ASX MCR, FIRST QUANTUM MINERALS LIMITED, TESLA INCORPORATED

BHP upbeat on ore, coal price outlook

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Original article by Matt Chambers
The Australian – Page: 18 : 4-Sep-17

The latest financial results of BHP Billiton and Rio Tinto were boosted by the rise in iron ore and coal prices. BHP’s chief commercial officer Arnoud Balhuizen says the resources giant expects the price of iron ore to remain strong until at least the end of 2017, while the price of coking coal could potentially be sustained beyond 2017. Meanwhile, the outlook for Fortescue Metals Group will be heavily influenced by Chinese steel mills’ demand for higher-grade iron ore. The price gap between benchmark iron ore and the 58 per cent iron ore produced by Fortescue has widened to more than $US20 per tonne.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Yawning gap in iron ore prices here to stay

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Original article by Tess Ingram, James Thomson
The Australian Financial Review – Page: 20 : 4-Aug-17

The differential between the benchmark price of iron ore and lower-grade ore has widened in recent months, which affected the earnings of miners such as Fortescue Metals Group and BC Iron in the June 2017 quarter. Fortescue expects the discount to narrow in the second half of fiscal 2018, but Rio Tinto CEO Jean-Sebastien Jacques forecasts that it will be sustained for some time. He argues that the shift is structural rather than cyclical. and he says China’s move to close down inefficient steel mills has been a major driver of the shift.

CORPORATES
RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BC IRON LIMITED – ASX BCI, ATLAS IRON LIMITED – ASX AGO, MINERAL RESOURCES LIMITED – ASX MIN, MOUNT GIBSON IRON LIMITED – ASX MGX, SMORGON STEEL GROUP LIMITED

Iron awe: metal surges but investors cautious

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Original article by Matt Chambers
The Australian – Page: 22 : 2-Aug-17

The price of iron ore for delivery to ports in China has risen to its highest level since early April 2017. However, the share prices of Australia’s three largest iron ore producers have not benefited significantly from the rise in the price of the steel input. Market observers have differing views on the reasons for the rise in the iron price, while Vale CEO Fabio Schvartsman expects it to remain at around the current level in the near-term.

CORPORATES
VALE SA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DOW JONES NEWSWIRES, REUTERS HOLDINGS PLC, DALIAN COMMODITY EXCHANGE, PLATTS, THE STEEL INDEX LIMITED

Copper prices tipped to reach boomtime high

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Original article by Matt Chambers
The Australian – Page: 20 : 27-Jul-17

The copper price has risen to its highest level in two years, at around $US2.84 a pound, due to factors such as supply constraints and China’s economic growth. Freeport-McMoRan CEO Richard Adkerson says rising demand for copper is likely to push the price of the metal above $US4/pound for the first time since 2011. He notes that a mooted large increase in global copper supply in 2016 did not eventuate, and he add that developing new copper mines is not viable at prices of $US2.50/pound or less.

CORPORATES
FREEPORT-McMORAN COPPER AND GOLD INCORPORATED, RIO TINTO LIMITED – ASX RIO, OZ MINERALS LIMITED – ASX OZL