Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Commodities Comment
No let-up from Queensland weather
Feature article
The latest chapter in the weather-afflicted Queensland summer is Tropical
Cyclone Yasi, now bearing down on the coastline. While the beleaguered
coal mining sector looks set to avoid a direct hit, disruption to ports and base
metals mines seems inevitable. We note that any volume constraint will
further tighten commodity markets already under intense strain from amplified
levels of demand.
Latest news
Commodities moved up strongly on Monday as a combination of positive
macroeconomic data and a drive for hard assets amid Egypt worries took
effect. Copper rose 2.3% on the day to $4.43/lb, while Brent crude oil pushed
above $100/t for the first time since 2008.
Following the release of more detailed Chinese steel production statistics, we
have noticed several inconsistencies in the data and conclude that China’s
crude steel production could have been under-reported by around 15mt in
2010. This is explored in further detail in this week’s China Commodities Call
“The mystery of Hebei steel data, part II”. We find that crude steel production
could have been under-reported by 24mtpa in 3Q10 and 27mtpa in 4Q10,
bringing total crude steel production for 2010 to ~640mt (compared to the
reported figure of 627mt). Our adjusted crude steel production estimates also
have an impact on figures for Chinese demand for raw materials. On our
revised numbers, China’s demand for iron ore is almost 20mt higher in 2010
than what was implied using the NBS data. This goes some way to explaining
the performance of the spot iron ore price over the final quarter of last year.
In the US, the Chicago PMI index increased to 68.8 in January, marking a rise
of two points from December, and the highest level that this index has
reached since July 1988. This reading was well ahead of consensus
expectations and suggests that economic growth remains brisk at the
beginning of 2011. Separately, data from the Department of Commerce
showed that US household spending rose by 0.7% MoM in December, while
household incomes rose by 0.4% MoM. Consumer spending is the main
driver of the economy, accounting for about 70% of GDP. Meanwhile,
Japanese industrial production increased by 3.1% MoM in December, which
was the strongest growth rate recorded for 11 months.
Demand for aluminium products in the USA and Canada, as measured by
shipments from domestic producers plus imports, increased by 11% YoY to
~770,000t in November 2010, although demand was down by 2.5% from
October, according to the Aluminium Association. Total demand for the 11
months to November 2010 was 15% higher than in the corresponding period
a year earlier.
Metal Bulletin has reported that India’s Supreme Court has ruled that the
Karnataka state iron ore export ban has no legal basis. As a result, the state
government will have to lift the ban and submit new guidelines to halt illegal
mining operations within the next two weeks. We would therefore expect
some enhanced exports from India in the coming months, however we
understand the local government’s plan will continue to impinge iron ore
shipments such that they will remain below 2009 and 2010 levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Commodities Comment
No let-up from Queensland weather
Feature article
The latest chapter in the weather-afflicted Queensland summer is Tropical
Cyclone Yasi, now bearing down on the coastline. While the beleaguered
coal mining sector looks set to avoid a direct hit, disruption to ports and base
metals mines seems inevitable. We note that any volume constraint will
further tighten commodity markets already under intense strain from amplified
levels of demand.
Latest news
Commodities moved up strongly on Monday as a combination of positive
macroeconomic data and a drive for hard assets amid Egypt worries took
effect. Copper rose 2.3% on the day to $4.43/lb, while Brent crude oil pushed
above $100/t for the first time since 2008.
Following the release of more detailed Chinese steel production statistics, we
have noticed several inconsistencies in the data and conclude that China’s
crude steel production could have been under-reported by around 15mt in
2010. This is explored in further detail in this week’s China Commodities Call
“The mystery of Hebei steel data, part II”. We find that crude steel production
could have been under-reported by 24mtpa in 3Q10 and 27mtpa in 4Q10,
bringing total crude steel production for 2010 to ~640mt (compared to the
reported figure of 627mt). Our adjusted crude steel production estimates also
have an impact on figures for Chinese demand for raw materials. On our
revised numbers, China’s demand for iron ore is almost 20mt higher in 2010
than what was implied using the NBS data. This goes some way to explaining
the performance of the spot iron ore price over the final quarter of last year.
In the US, the Chicago PMI index increased to 68.8 in January, marking a rise
of two points from December, and the highest level that this index has
reached since July 1988. This reading was well ahead of consensus
expectations and suggests that economic growth remains brisk at the
beginning of 2011. Separately, data from the Department of Commerce
showed that US household spending rose by 0.7% MoM in December, while
household incomes rose by 0.4% MoM. Consumer spending is the main
driver of the economy, accounting for about 70% of GDP. Meanwhile,
Japanese industrial production increased by 3.1% MoM in December, which
was the strongest growth rate recorded for 11 months.
Demand for aluminium products in the USA and Canada, as measured by
shipments from domestic producers plus imports, increased by 11% YoY to
~770,000t in November 2010, although demand was down by 2.5% from
October, according to the Aluminium Association. Total demand for the 11
months to November 2010 was 15% higher than in the corresponding period
a year earlier.
Metal Bulletin has reported that India’s Supreme Court has ruled that the
Karnataka state iron ore export ban has no legal basis. As a result, the state
government will have to lift the ban and submit new guidelines to halt illegal
mining operations within the next two weeks. We would therefore expect
some enhanced exports from India in the coming months, however we
understand the local government’s plan will continue to impinge iron ore
shipments such that they will remain below 2009 and 2010 levels.
No comments:
Post a Comment