COMMODITIES – PRICES

Conservative commodity price forecasts offer revenue windfall

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Original article by Perry Williams
The Australian – Page: 27 : 26-Mar-25

The budget papers show that the Treasury is continuing to adopt a conservative approach to commodity price forecasts. The budget’s revenue forecasts are based on expectations that the iron ore price will fall to $US60 per tonne at port by the end of March 2026; the price of the steel input is currently trading at around $US100 per tonne. UBS recently forecast that the iron ore price will remain within a range of $US90 to $US100/tonne for the next five years. The Treasury’s forecasts for other key commodities such as coal and LNG are also significantly below current prices.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD

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

LNG exports, prices surge to record levels as iron slumps

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Original article by Perry Williams, David Rogers
The Australian – Page: 13 & 16 : 7-Sep-21

The price of iron ore has fallen by more than 40 per cent since reaching a record high of $US233 per tonne in May. Federal Resources Minister Keith Pitt says strong growth in the price of both LNG and coal is helping to offset the slump in the price of iron ore. The LNG price in Asia has risen to nearly $US20 a gigajoule, while the price of Newcastle coal recently reached a record high of $US173 a tonne. Queensland’s LNG export projects have ramped up shipments in response to the surge in prices.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

Resources set to drive ASX to 8000 at year’s end

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Original article by William McInnes
The Australian Financial Review – Page: 28 : 9-Jul-21

Mike Aked of global investment manager Research Affiliates says Australia’s benchmark S&P/ASX 200 Index could rise above 8,000 points by the end of 2021. He expects the resources sector to drive the local market higher, on the back of the continued strength of commodity prices. Financial stocks have been the main driver of the local bourse’s recent rally, although the materials sector has surged in the last several weeks amid a rebound in the prices of commodities such as iron ore and copper.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, RESEARCH AFFILIATES LLC

China price blitz raises iron ore threat

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Original article by Michael Smith
The Australian Financial Review – Page: 1 & 10 : 25-May-21

The price of iron ore futures fell on 24 May after Chinese authorities announced plans to crack down on commodity price speculation by domestic traders and firms. The crackdown is also seen as an attempt to curb inflation, with China’s producer price index having risen 6.8 per cent year-on-year in April, compared to 4.4 per cent growth recorded in March. Traders expect the clampdown on commodity price speculation will impact on futures trading, but it is not expected to undermine strong demand for iron ore, which is being driven by "tight supply". The share prices of Australian iron ore producers also fell sharply.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP

Coal, alumina prices look sick on virus effects

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 28-Apr-20

The prices of Australia’s key commodity exports have retreated in response to the coronavirus pandemic. The price of premium hard coking coal was recently trading at $US122.8 per tonne, compared with $US210 per tonne in early May 2019. Likewise, the price of premium thermal coal shipped through the port of Newcastle has fallen to $US56 per tonne, down from more than $US120 per tonne in mid-2018. The alumina price has in turn fallen to $US226 per tonne, compared with more than $US600 per tonne in 2018. Increased supply from China after the nation’s lockdown restrictions were eased has contributed to the price weakness.

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Miners to bear the brunt of China woes

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Original article by Nick Evans
The Australian – Page: 25 : 29-Jan-20

The coronavirus crisis has weighed on the shares of Australian resources groups that have exposure to China. Shares in Rio Tinto have closed below $100 for the first time since mid-December, while BHP, Fortescue Metals Group, OZ Minerals and Sandfire Resources also retreated on 28 January. The prices of iron ore and base metals have also fallen in response to the coronavirus outbreak. Macquarie notes that based on the SARS pandemic, base metal prices may take 3-5 months to recover from their recent losses.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, OZ MINERALS LIMITED – ASX OZL, SANDFIRE RESOURCES NL – ASX SFR, MACQUARIE GROUP LIMITED – ASX MQG

Miners tipping China’s winter halts to ease

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Original article by Peter Ker, Brad Thompson, Mike Smith
The Australian Financial Review – Page: 15 & 20 : 28-Oct-19

Fortescue Metals Group COO Greg Lilleyman says China’s annual winter shutdown of industries such as steel-making is likely to have less impact on commodity prices than in recent years. He adds that it is hard to predict the extent of the shutdowns, given that much of the responsibility for implementing the policy to improve air quality has been delegated to provincial governments. South32 CEO Graham Kerr says that some winter production cuts are likely, but he adds that China is also likely to prioritise economic growth.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SOUTH32 LIMITED – ASX S32, WOOD MACKENZIE

Record trade surplus of $4.8b thanks to iron ore

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Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 4-Apr-19

New figures show that Australia’s trade surplus rose to a record $4.8bn in February, well ahead of analysts’ expectations of just $3.7bn. The result was boosted by an 11 per cent increase in the value of iron ore exports. Gareth Aird of the Commonwealth Bank expects commodity prices to rise further, and that the forecasts outlined in the April 2019 Budget will prove to be too conservative. Meanwhile, services exports rose by two per cent in February, while there was a one per cent decline in rural exports.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED, AUSTRALIA. DEPT OF THE TREASURY

Iron and coal to deliver surprise budget bonanza

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Original article by David Uren
The Australian – Page: 6 : 12-Feb-19

Federal government revenue will be boosted by the recent rally in the prices of Australia’s key export commodities. The mid-year budget update had forecast that the iron ore price would average $US55 per tonne in the first half of 2019, but it is widely tipped to reach $US100/tonne in coming days. The price of coking coal also remains well above the budget update’s forecast. Chris Richardson of Deloitte Access Economics expects the government to use the revenue gains to provide cash hand-outs in the April 2019 Budget.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA