SUPPLY AND DEMAND

Push to break China metals dominance

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Original article by Nick Evans
The Australian – Page: 17 & 20 : 3-Sep-19

A new report from the Department of Industry notes that Australia is one of the six leading sources of so-called critical minerals, such as rare-earth elements, cobalt, niobium, antimony, magnesium and tungsten. Cobalt and niobium are the only two minerals identified by the Department for which China is the major supplier and processor. Resources Minister Matt Canavan has highlighted the growth opportunities for Australia in terms of global supply of critical minerals. However, commodity prices and production costs will be the key issues for Australian miners.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, LYNAS CORPORATION LIMITED – ASX LYC

Federal debt boss: why borrowing isn’t easy

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Original article by Adam Creighton
The Australian – Page: 4 : 26-Aug-19

Australian Office of Financial Management CEO Rob Nicholl has rejected suggestions that the federal government’s capacity to increase its borrowings has been boosted by the downturn in bond yields. The yield on 10-year government bonds fell below the cash rate of one per cent earlier in August, and Nicholls argues that demand for government debt has not risen despite a global downturn in bond yields. The federal government is resisting pressure to ramp up its infrastructure spending instead of prioritising a return to a Budget surplus.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT

Victoria risk of blackouts as grid wilts

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Original article by Angela Macdonald-Smith, Mark Ludlow
The Australian Financial Review – Page: 1 & 6 : 22-Aug-19

The Australian Energy Market Operator has warned that there is a significant risk that Victoria will face electricity blackouts during the 2019-20 summer. It has released a report which notes that the state will not meet the required standard for electricity supply reliability during the coming summer months, citing factors such as unplanned outages at AGL Energy’s Loy Yang power station and Origin Energy’s Mortlake gas plant. AEMO also says there is a high risk of blackouts in Victoria over the next decade unless there is increased power generation.

CORPORATES
AUSTRALIAN ENERGY MARKET OPERATOR LIMITED, AGL ENERGY LIMITED – ASX AGL, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, ENERGYAUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY

Inpex expects glut of LNG to continue

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Original article by Perry Williams
The Australian – Page: 19 : 5-Aug-19

The spot price of LNG in Asia has fallen to $US4 per million British thermal units, compared with $US11/MMBtu in late 2018. The LNG market has been affected by factors such as increased supply and slowing global economic growth. However, Inpex CEO Takayuki Ueda is upbeat about the outlook for LNG, saying Asian demand will remain strong. Meanwhile, Inpex is considering an increase in the capacity of its Ichthys LNG project.

CORPORATES
INPEX CORPORATION, CHEVRON CORPORATION

Good news for exports with iron ore set to enjoy another bountiful year

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Original article by Samantha Bailey
The Australian – Page: 25 : 31-Jul-19

Credit rating agency Moody’s Investors Service expects that supply constraints will ensure that the price of iron ore remains high during the rest of 2019 and in 2020. Moody’s has cited factors such as the impact of a tailings dam collapse in Brazil in January and Cyclone Veronica in Western Australia for its revised forecast. The firm had previously expected the iron ore market to be in surplus in 2019.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA

China rare earth demand soft: Lynas

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Original article by Paul Garvey
The Australian – Page: 20 : 30-Jul-19

Rare earths producer Lynas Corporation has advised that its sales for the June quarter totalled 4,723 tonnes, compared with 5,030 tonnes in the three months to March. CEO Amanda Lacaze says demand for rare earths remains soft, despite ongoing trade tensions between the US and China. The subdued price for rare earths has prompted Lynas to increase the stockpiles at its processing plant in Malaysia. Lacaze adds that Lynas is still in talks with the Malaysian government regarding the renewal of its operating licence.

CORPORATES
LYNAS CORPORATION LIMITED – ASX LYC

Mining wages hit boom-time highs

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Original article by Peter Ker
The Australian Financial Review – Page: 1 & 6 : 15-Jul-19

Research by BDO Remsmart shows that wages for a number of jobs in the mining sector have risen above the peaks seen during the last resources boom. Western Australia in particular is seeing a surge in mining industry wages, as BHP, Rio Tinto and Fortescue Metals Group invest in new iron ore mines. Factors such as stricter rules on the use of foreign labour, declining enrolments in university mining courses and investment in new infrastructure projects on the east coast are also putting upward pressure on wages. The demand for staff has prompted some mining companies to hire WA School of Mines students up to 18 months before they graduate.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BDO REMSMART, CURTIN UNIVERSITY OF TECHNOLOGY. SCHOOL OF MINES

Iron ore prices to remain high

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Original article by Nick Evans
The Australian – Page: 20 : 9-Jul-19

The price of iron ore for delivery to China firmed on 8 July, after falling sharply in the previous week in response to calls for Chinese government intervention. Meanwhile, Ord Minnett expects the benchmark price of iron ore to remain high for the remainder of 2019, before averaging $US87 per tonne in 2020. The firm also notes that an increase in steel production has seen iron ore stockpiles at Chinese ports decline for 12 consecutive weeks. Ord Minnett has increased its Chinese steel production forecast for 2019 by seven per cent year-on-year, to 992 million tonnes.

CORPORATES
ORD MINNETT GROUP LIMITED, CHINA IRON AND STEEL ASSOCIATION, CHINA. NATIONAL DEVELOPMENT AND REFORM COMMISSION, VALE SA, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Miners cashing in as iron ore price surges

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Original article by Nick Evans
The Australian – Page: 28 : 4-Jul-19

The price of iron ore from the Pilbara peaked at $US185 per tonne in 2011, when the Australian dollar was at parity with its US counterpart. The headline price of Pilbara iron ore is now trading at almost $US125 a tonne, which equates to a relative price of nearly $US180 a tonne when a much lower exchange rate is taken into account. Macquarie says the spot price of iron ore may have further to run, given that stockpiles at Chinese ports are continuing to decline. Meanwhile, BHP and Fortescue Metals Group are likely to exceed their revised guidance for 2018-19 iron ore export volumes after strong performances in June.

CORPORATES
BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, HANCOCK PROSPECTING PTY LTD, ATLAS IRON LIMITED, MINERAL RESOURCES LIMITED – ASX MIN, VALE SA

Iron ore surges past $US120 but softer China demand looms

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Original article by Luke Housego
The Australian Financial Review – Page: 13 & 27 : 3-Jul-19

Shares in Australia’s three major iron ore producers rallied on 2 July after the price of the steel input rose above $US120 per tonne. Factors such as supply constraints and record Chinese demand for steel have been key drivers of the iron ore price in 2019. However, some market watchers believe that the current price of iron ore cannot be sustained, given the uncertain outlook for the Chinese economy. Fortescue Metals Group’s shares have gained 139 per cent so far in 2019, while BHP and Rio Tinto have gained 28 per cent and 41 per cent respectively.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, GRIFFITH ASIA INSTITUTE, THE CHAMBER OF MINERALS AND ENERGY OF WESTERN AUSTRALIA INCORPORATED