SUPPLY AND DEMAND

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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Target of million new homes by end of decade in jeopardy

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Original article by Mackenzie Scott
The Australian – Page: 6 : 7-Feb-23

Master Builders Australia CEO Denita Wawn says the nation’s construction industry is not building enough new homes to meet demand. The MBA has forecast that just 169,630 new homes will be built nationwide in 2022-23, well below the 200,000 that are needed each year to meet population demand. The MBA does not expect the annual new home build to reach the 200,000 threshold until 2026-27. The MBA’s forecasts will cast doubt on the federal government’s target of one million new homes in the five years from July 2024.

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MASTER BUILDERS AUSTRALIA INCORPORATED

Virgin IPO could be tough sell as bankers question timing

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Original article by Aaron Weinman
The Australian Financial Review – Page: 13 & 18 : 18-Jan-23

Private equity firm Bain Capital is widely tipped to proceed with an IPO of Virgin Australia in the second half of 2023. The mooted sharemarket float could be well-timed, given that airlines are benefiting from a post-pandemic upturn in demand for travel and the reopening of Australia’s borders to international tourists. However, some observers are concerned that demand for travel may peak ahead of the float, as growing pressure on household budgets due to rising interest rates and energy bills prompts them to reprioritise their spending. Some bankers also suggest that the high cost of international airfares and a lower Australian dollar will benefit Virgin, which has shifted its focus to the domestic market under Bain’s ownership.

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VIRGIN AUSTRALIA HOLDINGS LIMITED, BAIN CAPITAL LLC

US unions push back against Australian pilots

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Original article by Matthew Cranston
The Australian Financial Review – Page: 10 : 17-Aug-22

Large US airlines are seeking to hire about 13,000 pilots in 2022 and 2023, and some are offering sign-on bonuses of up to $US20,000. However, unions have objected to moves by airlines to recruit pilots from Australia using the E-3 visa scheme, which was introduced via the free-trade agreement between the two nations. The Air Line Pilots Association alleges that some airlines are abusing the visa scheme, which is only accessible to Australian workers. A number of factors have contributed to the shortage of pilots in the US, including the impact of the pandemic and the mandatory retirement age of 65.

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AIR LINE PILOTS ASSOCIATION

Rental affordability crisis looms as borders reopen

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Original article by Michael Bleby
The Australian Financial Review – Page: 33 & 34 : 24-Nov-21

A report from JLL warns that demand for rental housing in Australia will exceed supply in the medium-term, as state and international borders reopen in the wake of the pandemic. Leigh Warner of JLL says there has been a lot of focus on housing affordability, but rental affordability is set to become a major issue. Demand for apartments in particular is expected to exceed supply in the next few years, with a seven per cent decline in pipeline of new projects during the September quarter.

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JONES LANG LASALLE AUSTRALIA PTY LTD

Australia well-positioned to supply critical US minerals

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Original article by Matthew Cranston
The Australian Financial Review – Page: 25 : 10-Nov-21

The US Geological Survey has added nickel to its list of critical minerals. Australia is poised to benefit from this move, given that the nation accounts for 24 per cent of global nickel production. Zinc has also been added to the USGS list of critical minerals, while helium, potash, rhenium and strontium have been removed. The International Monetary Fund recently forecast that demand for critical minerals will rise sixfold over the next two decades.

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UNITED STATES. DEPT OF THE INTERIOR. UNITED STATES GEOLOGICAL SURVEY

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.

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

Coal boom to kick-start mines

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Original article by Lachlan Moffet Gray, David Rogers
The Australian – Page: 13 & 19 : 29-Sep-21

The price of thermal coal shipped from Newcastle in New South Wales has reached a record high of $US204.75 per tonne. The thermal coal price has now risen by more than 270 per cent since reaching a 12- month low of $US54.70 in October 2020. The price of coking coal has in turn risen by 183 per cent since reaching a yearly low. National Party senator Matt Canavan says the record prices are unlikely to be sustained; however, he adds that the high prices will encourage Australian coal miners to expand production, particularly in Queensland’s Galilee Basin.

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NATIONAL PARTY OF AUSTRALIA

Stimulus creates oversupply of homes

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Original article by Patrick Commins
The Australian – Page: 4 : 25-Aug-21

Tim Toohey of Yarra Capital says the take-up rate of the federal government’s HomeBuilder scheme was more than four times higher than expected. He says that together with state-based incentives, this will result in an oversupply of new housing by 2023. Toohey adds that there is also a good chance that house prices will fall over the next two years. The government received more than 99,000 applications to build a new home via the scheme, as well as some 22,000 applications to undertake renovations on an existing home.

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YARRA CAPITAL PARTNERS PTY LTD

A perfect storm is brewing for Australia’s iron ore miners

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Original article by Stephen Bartholomeusz
The Age – Page: Online : 20-Aug-21

A convergence of "China-centric" developments have seen the price of iron ore fall by over 30 per cent since its May peak, and some will have long-term impacts on demand for Australia’s most valuable export commodity. One of these developments is China’s commitment to achieve a peak in its carbon emissions by 2030 and to be net zero by 2060. China’s steel industry accounts for 13 per cent of its emissions, so this is one of the main areas of its focus, while it is also seeking to source new supplies of iron ore.

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