BUSINESS FORECASTING

LNG party to end this year as glut looms

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 11 & 12 : 9-Jan-24

Bernstein Research has forecast that a looming increase in global LNG supply could potentially see prices fall by up to 47 per cent by 2027. The firm notes that global supply is set to increase by about 140 million tonnes by the end of 2024, and this is set to be sustained for the next three years. Neil Beveridge of Bernstein says the global LNG market is reaching a ‘turning point’, and it will revert from being net short to net long in the next several years. Australia exported a record $92.2bn worth of LNG in 2022-23, but expectations of lower export volumes and prices would have a significant impact on future government revenue.

CORPORATES
BERNSTEIN INVESTMENT RESEARCH AND MANAGEMENT

Iron ore tipped to hit $US130 a tonne this year

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Original article by Joanne Tran
The Australian Financial Review – Page: 23 : 2-Nov-23

Citigroup says there is potential for the Chinese government to provide further support for the nation’s property sector, after policymakers recently issued an additional one trillion yuan ($217.8 billion) worth of central government bonds. The firm contends that the iron ore price could rally if China pursues further stimulus in order to "engineer" a strong start to 2024. Citi has upgraded its short-term price forecast for the steel input from $US100 per tonne to $US120/tonne, but adds that further Chinese stimulus measures could see it test the $US130/tonne level by the end of 2023.

CORPORATES
CITIGROUP INCORPORATED

Goldman steels for iron ore slide into bear market

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Original article by Alex Gluyas
The Australian Financial Review – Page: 27 : 9-Aug-23

Iron ore futures in Singapore have fallen to below $US99 per tonne, down from a cyclical high of $US114.95 per tonne in July. Goldman Sachs expects the decline to be sustained, forecasting that the iron ore price will fall by another 12 per cent to $US90/tonne in the second half of 2023. Nicholas Snowdon of Goldman Sachs says factors such as lower steel production in China and an increase in global iron ore supply will result in a 68 million tonne surplus of the steel input in the six months to 31 December.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED

Chinese steel has peaked: Rio boss

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Original article by Nick Evans
The Australian – Page: 13 & 16 : 2-Aug-23

Official figures show that China’s crude steel production fell by 21.7 million tonnes year-on-year in 2022, to 1.01 billion tonnes. Rio Tinto CEO Jakob Stausholm believes that China’s steel production has peaked and output will be flat over the next several years, before starting to decline by the end of this decade. However, Stausholm expects global demand for iron ore to remain strong, as steel production in other developing countries increases. He adds that Chinese steel producers may also opt to build steel mills in other countries.

CORPORATES
RIO TINTO LIMITED – ASX RIO

Goldman slashes iron ore forecast 18pc on weak Chinese demand

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Original article by Joanne Tran
The Australian Financial Review – Page: 27 : 7-Jun-23

Investment bank Goldman Sachs has downgraded its three-month price target for iron ore to $US80 per tonne, and it now expects demand for the steel input to be flat in 2023. Goldman Sachs anticipates that there will be a global surplus of iron ore for the first time since 2018, and this surplus will increase in 2024. The firm also expects the iron ore price to average $US90 per tonne in the first half of 2023, compared with its previous forecast of $US110/tonne.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED

Iron ore, coal price rises add $22b to the bank

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Original article by Mark Ludlow
The Australian Financial Review – Page: B12 : 10-May-23

The budget papers show that the Treasury has upgraded its price assumptions for key export commodities. Treasury has traditionally adopted a conservative approach to commodity price forecasts, which was reflected in the federal government’s first budget in October. The iron ore price had been forecast to be around $US55 per tonne by now, but this has been upgraded to $US60/tonne. The price assumptions for LNG, thermal coal and metallurgical coal have also been upgraded. Treasury expects the revised price assumptions to boost the budget bottom line by around $2bn.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

The bears are out again for iron ore

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Original article by Sean Smith
The West Australian – Page: Online : 21-Apr-23

The iron ore price has averaged $US109 per tonne in Singapore trading so far in the 2022-23 financial year, having peaked at around $US130 a tonne in March. The price of the steel input remains well above the Western Australian government’s revised full-year forecast of $US87.40 per tonne, which was issued in December. However, some analysts are bearish about the outlook for the iron price over the medium-term, citing factors such as rising output from major producers and a slower than expected rebound in demand for steel in China’s construction industry. Iron ore is WA’s biggest export earner.

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Goldman Sachs rules Rio buy

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Original article by Joanne Tran
The Australian Financial Review – Page: 26 : 7-Mar-23

Investment bank Goldman Sachs is upbeat about the outlook for iron ore, upgrading its price forecast for the steel input in 2023 to $US120 per tonne. Its previous forecast was $US100 a tonne. Goldman Sachs expects an iron ore deficit of 43 million tonnes, due to factors such as rising demand from China as the nation’s economy reopens. The firm has a ‘buy’ recommendation on Rio Tinto’s shares and a ‘sell’ rating on Fortescue Metals Group, while it has a ‘neutral’ position regarding BHP.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP

Aussie gold production set to grow

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Original article by Stuart McKinnon
The West Australian – Page: Online : 16-Mar-22

Fitch Solutions is upbeat regarding the near-term outlook for Australian gold producers. The research house has forecast that local gold production will grow by an average of one per cent over 2022-2026, and gold output will rise from 10.8 million ounces in 2021 to at least 11.15 million ounces in 2031. The firm now expects the gold price to average $US1,900/oz in 2022, compared with its previous forecast of $US1,700/oz; it notes that the invasion of Ukraine has prompted renewed interest in gold as a ‘safe haven’ asset.

CORPORATES
FITCH SOLUTIONS

Iron ore’s 45pc surge won’t last long: strategists

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Original article by William McInnes
The Australian Financial Review – Page: 29 : 13-Oct-21

The spot price of iron ore has risen above $US135 per tonne, and Fastmarkets MB notes that the price of the steel input has now gained 45 per cent in the last three weeks. However, Lachlan Shaw of UBS is cautious about the outlook for iron ore, noting that the rebound has been at least partially due to restocking linked to China’s recent week-long National Day holiday. Morgan Stanley is bearish about the near-term outlook for iron ore, forecasting that the price will average $US85 a tonne during the December quarter.

CORPORATES
FASTMARKETS MB, UBS HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED