BUSINESS FORECASTING

No New Year’s cheer for iron ore: analysts

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Original article by Timothy Moore
The Australian Financial Review – Page: 22 : 3-Dec-18

Data from Fastmarkets MB shows that the spot price for iron ore with 62 per cent iron content was trading at $US65.95 a tonne at the end of November, having peaked at a month-high of $US77.2/tonne on 9 November. Analysts from Liberum Capital are bearish about the outlook for iron ore, forecasting that falling Chinese steel mill profits will reduce demand for higher-grade ore. Liberum has also changed its recommendation on shares in Rio Tinto, BHP Group and Anglo American to "sell".

CORPORATES
FASTMARKETS MB, LIBERUM CAPITAL LIMITED, RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP, ANGLO AMERICAN PLC, CAPITAL ECONOMICS LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, MACQUARIE CAPITAL PTY LTD, WEALTH WITHIN PTY LTD

Rio still upbeat on Chinese demand

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Original article by Perry Williams
The Australian – Page: 20 : 13-Nov-18

Rio Tinto CEO Jean-Sebastien Jacques says the Chinese steel industry’s demand for higher-grade iron ore remains strong in the wake of production capacity cutbacks and measures aimed at reducing air pollution. He has also told the UBS Australasia conference in Sydney that structural changes in the aluminium sector will take longer to have an impact

CORPORATES
RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD

BHP cuts US, China growth targets on trade tensions

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Original article by Peter Ker
The Australian Financial Review – Page: 21 : 31-Oct-18

BHP Billiton has forecast that GDP growth for both China and the US will be cut by 0.5 per cent to 0.75 per cent over the next two years as a result of the trade war between the two nations. However, BHP’s chief commercial officer Arnoud Balhuizen says the trade tensions have not yet had a "material impact" on the resources giant, even though it has weighed on the prices of some commodities. Balhuizen expects demand for iron ore and coking coal to remain strong in 2019.

CORPORATES
BHP BILLITON LIMITED – ASX BHP

Gold sector told to consolidate

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Original article by Peter Ker
The Australian Financial Review – Page: 22 : 25-Oct-18

GoldCorp CEO David Garofalo expects an increase in mergers and acquisitions activity among gold producers, arguing that the large number of players in the sector means it is becoming harder to attract capital. He says further consolidation may be necessary in order to gain the support of generalist investors. Garofalo has downplayed speculation about a potential merger between GoldCorp and Newcrest Mining, which produced 548,351 ounces of gold during the first quarter of 2018-19. This is below the rate required to meet its full-year production forecast.

CORPORATES
GOLDCORP INCORPORATED, NEWCREST MINING LIMITED – ASX NCM, BARRICK GOLD CORPORATION, RANDGOLD RESOURCES LIMITED, REGIS RESOURCES LIMITED – ASX RRL, SARACEN MINERAL HOLDINGS LIMITED – ASX SAR

China’s coal clamps no surprise, says Yancoal

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 9-Oct-18

James Rickards, Yancoal Australia’s general manager of investor relations, does not expect coal prices to be significantly affected by China’s move to reduce thermal coal imports. He argues that it had been widely anticipated, as the Chinese government tends to curb coal imports every year in order to support local producers. Meanwhile, Lachlan Shaw of UBS says Chinese demand for thermal coal is likely to remain strong during the upcoming northern winter.

CORPORATES
YANCOAL AUSTRALIA LIMITED – ASX YAL, UBS HOLDINGS PTY LTD, RIO TINTO LIMITED – ASX RIO, INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE

Australia likely to be fringe player in next LNG boom

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 23 : 4-Oct-18

Royal Dutch Shell CEO Ben van Beurden expects global demand for LNG to double by 2035. Shell has positioned itself to be a key player in the next LNG boom after making a final investment decision on its $C40bn ($43bn) LNG Canada project. Wood Mackenzie estimates that LNG projects with an annual production capacity of 50-60 million tonnes will receive final approval in 2019. However, Australia is not expected to play a major role in the new LNG boom, as only the Prelude and Ichthys projects are currently being developed.

CORPORATES
ROYAL DUTCH SHELL PLC, WOOD MACKENZIE, INPEX CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH

Aussie miners hit by China coal curbs

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Original article by Michael Smith, Peter Ker
The Australian Financial Review – Page: 17 & 22 : 27-Sep-18

China’s imports of thermal coal rose 18.2 per cent year-on-year in the first eight months of 2018, according to official data. Thermal coal imports from Australia were up almost 27 per cent in the first seven months of the year. Meanwhile, the Chinese Government has reportedly introduced import quotas on thermal coal at some of the nation’s major ports in a bid to boost demand for Chinese coal. The bulk of China’s coal imports in 2017 were sourced from Indonesia, and a China-based trader says that nation will be harder hit by the import quotas than Australian coal producers.

CORPORATES
NEW HOPE CORPORATION LIMITED – ASX NHC, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, WHITEHAVEN COAL LIMITED – ASX WHC, BHP BILLITON LIMITED – ASX BHP, YANCOAL AUSTRALIA LIMITED – ASX YAL, SOUTH32 LIMITED – ASX S32

BHP fire halts work as nickel stages a revival

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Original article by Matt Chambers
The Australian – Page: 23 : 26-Sep-18

BHP Billiton is still assessing the damage to its nickel smelter in Kalgoorlie after a fire in the plant’s furnace room on 23 September. A spokeswoman has indicated that it is uncertain as to when production will resume. The smelter is part of BHP’s Nickel West business, which the resources group had unsuccessfully tried to sell in recent years. Rising demand for nickel has boosted the fortunes of Nickel West, and BHP may elevate it to a core asset. Macquarie Group is upbeat about the outlook for nickel, forecasting that it will average $US13,800 per tonne in 2018 and $US20,000/tonne in 2019.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, NICKEL WEST, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD, DIGGERS AND DEALERS FORUM, LONDON METAL EXCHANGE LIMITED, WMC RESOURCES LIMITED, SOUTH32 LIMITED – ASX S32

Fortescue out of kilter on discounts

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Original article by Matthew Stevens
The Australian Financial Review – Page: 30 : 9-Aug-18

Fortescue Metals Group CEO Elizabeth Gaines maintains that the price discount for lower-grade iron ore is cyclical rather than structural. The general consensus among iron ore producers is that the price gap will be sustained, with executives from Rio Tinto and Vale recently expressing the view that Chinese steel mills will continue to favour higher-grade ore. The benchmark price of iron ore rose by almost three per cent on 7 August, to almost $US70 per tonne.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, VALE SA, BHP BILLITON LIMITED – ASX BHP, CITIGROUP INCORPORATED

FMG sees end in sight to discounting

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Original article by Brad Thompson
The Australian Financial Review – Page: 18 : 8-Aug-18

Fortescue Metals Group CEO Elizabeth Gaines has told the Diggers & Dealers forum in Kalgoorlie that the pure-play iron ore miner still considers the price discount for lower-grade ore to be cyclical. She said the price gap will eventually narrow, although it is too soon to know when this will occur. Gaines also said Fortescue could seek a seat on Atlas Iron’s board after choosing to retain a stake in the takeover target. She added that Fortescue expects to participate in the consultation process regarding the development of new South West Creek berths at Port Hedland.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, ATLAS IRON LIMITED – ASX AGO, DIGGERS AND DEALERS FORUM, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, MINERAL RESOURCES LIMITED – ASX MIN, ROY HILL HOLDINGS PTY LTD