SINGAPORE, Aug 1 (Reuters) - Chinese iron ore futures fell to their lowest level in six weeks on Friday, pressured by expectations that supply would remain high while demand for steel in the world's biggest consumer barely grew in the first half of the year. China's apparent steel demand rose 0.4 percent to 376 million tonnes in January-June, the China Iron and Steel Association (CISA) said. Inventories held by large steel mills rose in June after a three-month decline, it added, underlining slow consumption. Iron ore for January delivery on the Dalian Commodity Exchange touched a session low of 670 yuan ($108.5) a tonne, its weakest since June 20. It was down 1 percent at 671 yuan by midday. The most-traded January rebar contract on the Shanghai Futures Exchange slipped 0.4 percent to 3,060 yuan a tonne. Investors found no joy in more evidence of strength in the Chinese economy after a spate of stimulus measures. China's factories posted their strongest growth in at least 1-1/2 years in July as new orders surged to multi-month highs, two surveys showed. China buys around two-thirds of the world's iron ore and supply of the steelmaking raw material has exceeded demand this year. Iron ore supply in China outpaced demand by 52 million tonnes in the first half of 2014, according to CISA. Benchmark 62-percent grade iron ore for immediate delivery to China .IO62-CNI=SI eased 0.3 percent to $95.60 a tonne on Thursday, according to data compiler Steel Index which said mills retreated from the market. The price rose 1.9 percent in July, its second straight monthly gain. The price of the commodity that is the biggest revenue earner for global miners Vale and Rio Tinto has recovered from a 21-month low of $89 reached in June, but has struggled to bounce back to $100 since falling below that level in mid-May. "Business is really tight right now and we're hardly making any margin," said a Shanghai-based iron ore trader, adding he has traded only two cargoes in July. Top miner Vale expects Chinese demand for iron ore to rise in the second half of the year, but its head of iron ore business Jose Carlos Martins said the company will focus less on the price and more on its capacity to deliver volumes and cut costs. Weaker iron ore prices were largely behind a 43 percent decline in Vale's second-quarter net profit even as the miner increased production to a record 79.45 million tonnes.
"Buying interest continues to be sluggish as mills expect Australian supply to be plentiful in August, despite a marginal fall in port stocks in July," Australia and New Zealand Bank analysts said in a note. "With more than 110 million tonnes of stocks at Chinese ports, upside is expected to remain limited in the near term." The inventory of imported iron ore sitting at Chinese ports fell to 111.95 million tonnes on July 25 SH-TOT-IRONINV from 113.60 million tonnes the previous week, based on data compiled by SteelHome, which tracks stocks at 44 ports. The stockpiles are still up nearly 30 percent this year and not far below a record high of 113.7 million tonnes reached in early July.
IRON ore and coking coal prices may have already reached the bottom, a leading commodity analyst says, but any recovery is going to be more gradual than in the past.
ANZ’s global head of commodity strategy, Mark Pervan, has outlined in an extensive report that with the stabilisation of the overall macro environment, commodity markets are entering the second half of 2014 on a positive note. But, Mr Pervan added, it was likely to be a far more gradual recovery than in the past.
“It will be tempered by lower liquidity and a stronger US dollar as the Fed nears policy normalisation,” he said. “Supply-side issues remain, but the bottom appears to have passed for coking coal and iron ore. Seasonal drops in power demand will cap any thermal coal recovery.”
ANZ’s Mr Pervan said iron ore was showing signs of recovery but that it looked “hard-won”.
BEIJING, Aug. 3 (Xinhua) -- Business activity in China's non-manufacturing sector slightly slowed in July, an official monthly survey showed on Sunday.
The Purchasing Managers Index (PMI) of the non-manufacturing sector came in at 54.2 percent in July, down 0.8 percentage points from June, according to a report jointly released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP).
The non-manufacturing PMI tracks activity in sectors including construction, software, aviation, railway transport and real estate. July's reading marked the lowest level in six months, but still well above the 50-threshold that demarcates expansion and contraction.
Compared with a month earlier, the sub-index for new orders remained flat at 50.7 percent, while that for new export orders saw a slight drop of 0.4 percentage points to 49.8 percent.
The sub-index for employment retreated 1.1 percentage points to 49.3 percent in July, and that for business outlook recovered 1.1 percentage points to reach 61.5 percent.
Cai Jin, deputy head of the CFLP, said the slight fluctuation of the indices showed the market is generally stable.
Notably, the property market remained weak, with the business activity, new orders and price indices for the sector all dipping below the 50-percent demarcation.
Earlier offical data showed China's home prices continued a downward trend in more cities in June, with the average price in these 70 cities slipped 0.47 percent from the previous month, marking a second consecutive monthly drop following a 0.15-percent fall in May.
Sunday's data came on the heels of the manufacturing data that showed activity quickened to the highest level in more than two years in July, reinforcing signs that the economy is firming up on government support policies.
After a shaky start this year, Chinese policymakers have pinned hopes on accelerating investment on railways and infrastructure, quickening fiscal spending, and selectively easing monetary policies to support faltering growth.
Helped by these efforts, China's economic growth showed more recovery signs in the second quarter, with growth accelerating to 7.5 percent from the 7.4-percent expansion in the first.
Reading Mauldin the other day on a (pretty dry subject) of GDP calculations – I noticed that mining (which includes shale gas production), was up almost 15% y-o-y. In fact mining was responsible for all of the growth in gross output for private industries in the first quarter in the US – not surprisingly that is where a large percentage of the new jobs are and why their unemployment rate is falling so quickly.
That’s what annoys me about the theme of current general economic discussion, in reality, its productivity and private investment that is essential to a growing economy that matters; but all the talking heads focus on consumer spending and government deficits as policy. The reason is that consumption makes up 70% of the US GDP calculation, whereas business expenditure is only 16% – which raises the obvious question, does that mean business expenditure is relatively unimportant?
Unequivocal not!!! On a GO (Gross Output) basis, US business expenditure makes up 52% of total expenditure, and 62% on a GDE basis – which is intuitive. Its investment and expenditure that drives the economy – not cafes selling coffee and walnut bread. That’s why despite some really bad decisions by Obama – the real US economy is roaring back
We are all looking at the wrong thing… and why we are about to be so buggered (although GDP won’t reflect the change – it will be a complete surprise to all and sundry). And why stupid numties don’t understand why losing manufacturing is such a big deal.
I now feel like using some strong language – but won’t.
Base metals finished mostly higher on demand hopes after the US manufacturing sector expanded more than forecast in July, and on views that US factory orders accelerated through June. Gold futures declined as equity markets rallied, reducing the appeal of the precious metal as an alternative investment. Crude oil benchmarks rose on stronger geo-political risks as tensions escalated in Iraq. Iron ore rose by 0.2% to USD95.40/t (CFR China).
Shanghai debuted Yuan-denominated thermal coal and iron ore swaps, highlighting the efforts by China, the world’s largest consumer of raw materials, to encourage more domestic trading and become a more influential player in global iron ore and coal markets.
Vale’s coking coal sales rose by 5.6% y/y to 1.82Mt in the June quarter, while its average realised price fell by 22.7% to USD108/t.
Japan’s metallurgical coal imports fell by 17.3% y/y to 5.9Mt in June, despite the average realised coking coal price falling 20.7% y/y to USD111/t.
Brazilian iron ore miner, CSN, has reported its iron ore shipments rose by 20% y/y and 13% q/q to 7.2Mt in the June quarter.
Peru’s government has approved the stalled 120ktpa Tia Maria copper mine project on environmental grounds. The project has been stalled for the last three years as local residents claimed the mine would hurt water supplies.
Contractors at Colombia’s coal mines will vote later today to continue striking. Mining companies have said the stoppages have impacted operations minimally. Colombia is one of the world’s major thermal coal exporters.
SINGAPORE, Aug 4 (Reuters) - China's iron ore futures edged higher on Monday, supported by expectations firmer steel prices in the world's biggest consumer would aid demand for the raw material. Stocks of imported iron ore across China's ports fell for a second straight week last week, suggesting firm demand as buyers sought cheap cargoes. But the stockpiles are still near a record level at above 111 million tonnes and could remain a drag on spot prices that have fallen 29 percent this year. Iron ore for January delivery on the Dalian Commodity Exchange gained 0.2 percent to 675 yuan ($109.3) a tonne by 0313 GMT, recovering from a one-week trough of 669 yuan reached earlier. "The volume of ready iron ore stock in China's ports has been decreasing and we believe the inventory at mills is also low. On the other hand, prices for steel products are also good and some mills are in profit," said an iron ore trader based in China's eastern Shandong province. Stocks of imported iron ore in Chinese ports fell by 400,000 tonnes to 111.55 million tonnes as of Aug. 1, according to SteelHome which tracks data at 44 ports in the country. It was the second consecutive week that the inventory has fallen, although it is not far below a record high of 113.70 million tonnes reached in early July. The most-traded rebar contract for delivery in January on the Shanghai Futures Exchange rose half a percent to 3,079 yuan a tonne, regaining ground after a three-day decline. Benchmark 62-percent grade iron ore for immediate shipment to China .IO62-CNI=SI dropped 0.4 percent to $95.20 a tonne on Friday, according to data compiled by Steel Index. The commodity gained 2 percent in July in its second straight monthly gain, but has struggled to bounce back to $100 after breaching that level on May 19. Plentiful supply has weighed on prices of the steelmaking raw material as low-cost miners from Australia and Brazil boosted production, hoping to edge out smaller exporters as prices dropped. "I see prices stabilising at around $95," said the Shandong-based trader whose company has held on to 300,000 tonnes of iron ore cargoes for a month now, waiting for better price offers from buyers.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy