SUPPLY AND DEMAND

Iron’s endless summer keeps on keeping on

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 43 : 21-Dec-19

Shares in Fortescue Metals Group are trading at an 11-year high, boosted by factors such as continued strong demand for iron ore in China and supply disruptions in Brazil. Meanwhile, Rio Tinto’s shares have regularly traded above $100 in 2019, and the stock has not fallen below $35 in the last decade. Demand for iron ore has defied expectations over the last 10 years. The price of the steel input peaked at almost $US190 per tonne in 2011; its fall to around $US80/tonne in subsequent years prompted some observers to forecast that the iron ore boom was over. However, Australia’s iron ore exports reached a record $77bn in 2018-19 and could top $81bn in 2019-20. Likewise, some experts forecast that China’s annual steel production will exceed one million tonnes for the first time in 2020.

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

China appetite for ore strong, says Fortescue

roymorgansocial Leave a comment

Original article by Brad Thompson
The Australian Financial Review – Page: 21 : 16-Dec-19

Fortescue Metals Group CEO Elizabeth Gaines is upbeat about the outlook for the iron ore price in 2020. She says the benchmark price will continue to benefit from inventory restocking ahead of the Chinese New Year, while she does not expect the price gap between benchmark iron ore and the lower-grade ore produced by Fortescue to widen much. Fortescue received 89 per cent of the benchmark price during the September 2019 quarter, after the gap had widened significantly in mid-2018.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG

New report finds govt must build at least 20,000 affordable homes a year

roymorgansocial Leave a comment

Original article by Euan Black
The New Daily – Page: Online : 11-Dec-19

The Australian Housing & Urban Research Institute has warned that the shortage of affordable rental housing has risen since 2011 and will continue to worsen in coming years. The AHURI estimates that the shortage of affordable homes for the lowest 20 per cent of income earners now tops 212,000. The lead researcher, Swinburne University’s Professor Kath Hulse, says that neither the public or private sector are building enough affordable homes. The AHURI has concluded that the federal government needs to build at least 200,000 affordable homes over the next 10 years.

CORPORATES
AUSTRALIAN HOUSING AND URBAN RESEARCH INSTITUTE, SWINBURNE UNIVERSITY OF TECHNOLOGY

Port logjams threaten coal demand: Tata Steel

roymorgansocial Leave a comment

Original article by Luke Housego
The Australian Financial Review – Page: 19 : 5-Dec-19

Tata Steel MD T.V. Narendran says India will continue to source the bulk of its coking coal from Australia; however, he warns that India will seek other sources of coking coal if action is not taken to address bottlenecks at Queensland’s coal shipping ports. Narendran notes that India currently imports about 50 million tonnes of coking coal a year, and this will grow significantly amid expectations that the nation’s steel production will double over the next decade.

CORPORATES
TATA STEEL, AUSTRALIA. OFFICE OF THE CHIEF ECONOMIST

Base metals set to rebound in 2020: Ausbil

roymorgansocial Leave a comment

Original article by Nick Evans
The Australian – Page: 18 : 11-Nov-19

The price of copper remains below $US6000 per tonne on the London Metals Exchange, having reached a low of $US5,610/tonne in early September. However, Ausbil portfolio managers are upbeat about the outlook for copper and other base metals in 2020; they say indications that the US-China trade war is stabilising should be enough to prompt manufacturers to begin restocking their raw materials inventory.

CORPORATES
AUSBIL INVESTMENT MANAGEMENT LIMITED, LONDON METAL EXCHANGE LIMITED

First-home buyers surge back for a foothold as market rises

roymorgansocial Leave a comment

Original article by Nila Sweeney, Larry Schlesinger
The Australian Financial Review – Page: 29 : 7-Nov-19

Real estate developers note that their recent land releases in new housing estates have attracted strong demand among people who are buying their first home. Nigel Edgar of Frasers Property says first-home buyers now account for 35-45 per cent of its sales, compared with just 15 per cent when the residential market was at its peak in 2017. Likewise, Luke Fryer of Metricon says sales to first-home buyers increased by 25 per cent in the three months to September. Off-the-plan apartments are also attracting interest among first-home buyers.

CORPORATES
FRASERS PROPERTY AUSTRALIA PTY LTD, METRICON HOMES, HIGHLAND PROPERTY GROUP, VIRGATE, WOLFDENE, BIS OXFORD ECONOMICS PTY LTD, JINDING DEVELOPMENTS

No market for new uranium mines: Cameco

roymorgansocial Leave a comment

Original article by Nick Evans
The Australian – Page: 20 : 6-Nov-19

Canada-based Cameco will produce just nine million pounds of uranium in 2020; instead, the bulk of the uranium it supplies to customers will be sourced from the spot market. CEO Tim Gitzel says there is no economic case at present for the construction of new uranium mines, given the large amount of uranium that has been stockpiled. The spot price of uranium averaged $US25.68 a pound in the September quarter, which is well below the long-term price that is required for Cameco’s mines in Australia to be viable.

CORPORATES
CAMECO CORPORATION, BHP GROUP LIMITED – ASX BHP, ENERGY RESOURCES OF AUSTRALIA LIMITED – ASX ERA, PALADIN ENERGY LIMITED – ASX PDN, DEEP YELLOW LIMITED – ASX DYL

BHP’s Colombian coal to take on Australian miners in Asia

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 24 : 31-Oct-19

The Cerrejon thermal coal mine in Colombia will shift its export focus to Asia in response to declining demand for coal in Europe. Cerrejon president Guillermo Fonseca expects the transition to clean fuels and renewable energy will take some time, and the region will still be using coal in 2050. The Cerrejon mine is jointly owned by BHP, Glencore and Anglo America, and BHP is believed to be keen to exit both Cerrejon and the Mt Arthur mine in New South Wales.

CORPORATES
BHP GROUP LIMITED – ASX BHP, GLENCORE PLC, ANGLO AMERICAN PLC

Treasury $1bn debt sale comes up short

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 26 : 25-Oct-19

The Australian Office of Financial Management’s CEO Robert Nicholl has downplayed the fact that investors did not fully support a new issuance of Treasury notes. The AOFM attracted bids totalling $936m for a $1bn issuance of Treasury Notes that will mature on 24 January 2020. Nicholl notes that demand for short-term debt instruments such as Treasury Notes can vary significantly, adding that the shortfall will not be a concern for the federal government unless it becomes a regular occurrence.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Joint strategy with US on rare earths

roymorgansocial Leave a comment

Original article by Geoff Chambers
The Australian – Page: 7 : 11-Oct-19

Resources Minister Matt Canavan has indicated that a joint strategy with the US regarding critical minerals such as rare earths will be finalised in coming weeks. He has stressed the need for co-operation between governments to ensure that new rare earths projects go ahead. US Commerce Secretary Wilbur Ross, who is visiting Australia, has emphasised the importance of processing rather than merely mining rare earths. Trade Minister Simon Birmingham says the federal government wants processing of critical minerals to be undertaken in Australia.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, UNITED STATES. DEPT OF COMMERCE, AUSTRALIA. DEPT OF FOREIGN AFFAIRS AND TRADE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, LYNAS CORPORATION LIMITED – ASX LYC