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Feature article
In today‟s article, we outline the main changes to our commodity price
forecast profiles, which were released at 11:30am London time on Tuesday.
Our views concerning both the sustainability and amplitude of Chinese
demand remain the main unchanged. Thus, while near term risks are real and
will drive sentiment over the coming months, Chinese importance in terms of
both base consumption and consumption growth makes commodities a
natural defensive in a slowing OECD environment. As such, the supply side
of the industry is likely to remain the bottleneck across a number of
commodities in the coming years.
We have become increasingly positive on the thermal coal outlook over the
next two years, and have also pushed through substantial upgrades to our
precious metals forecasts. We also continue to believe that iron ore is
undervalued regarding the longevity of prices in excess of $150/t. In base
metals, copper‟s fundamentals remain compelling, however general
preoccupation with a slowdown in the rate of demand growth means zinc and
aluminium offer better investment opportunities in the short term.
For a summary of our views on the entire base, precious, steel, bulk,
agricultural and energy commodities that we cover, please ask your sales
representative for a copy of the September edition of the Macquarie
Commodities Compendium, released alongside our new forecasts.
Latest news
Base metals prices suffered again on Wednesday, as an increase in index
fund selling impacted many. The less liquid metals were hit hardest, with lead,
nickel and tin all down around 4%. Meanwhile, copper arrested its downward
trend to close flat on the day.
As anticipated more lead metal stocks have arrived into LME warehouses in
Malaysia and Singapore. On Tuesday there was a net increase of 29,400t
(8.5%) to 374,825t, the highest stock level seen since late 1994.
The Mineworkers Union of Nambiaare threatening Rio Tinto's Rossing
uranium mine with strike action according to Reuters. The strike notice
comes over a breakdown in negotiations over output incentives, with the
stoppage slated to start on Friday. Low ore grades have seen production
from Rossing slip in 1H11 by 37.5%YoY.
Further 2011 supply downgrades were announced in the met coal market on
Wednesday. Firstly, Walter Energy lowered 2H 2011 sales guidance from
5.9mt to ~5.2mt, all due to operational issues at its mines. Alpha Natural
Resources also cut met guidance by ~0.5mt, and cited among its reasons
curtailed customer activity levels in Asia. In our view, this is not a demand
issue, more one of substitution. As decent quality Australian coal has come
back into the market, Asian demand for the high-vol crossover US coal has
waned, as the economics on a quality and freight adjusted basis do not make
sense for steelmakers. China‟s net seaborne met coal imports were a little
lower than July levels at 3.05mt, but show no significant pullback.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Feature article
In today‟s article, we outline the main changes to our commodity price
forecast profiles, which were released at 11:30am London time on Tuesday.
Our views concerning both the sustainability and amplitude of Chinese
demand remain the main unchanged. Thus, while near term risks are real and
will drive sentiment over the coming months, Chinese importance in terms of
both base consumption and consumption growth makes commodities a
natural defensive in a slowing OECD environment. As such, the supply side
of the industry is likely to remain the bottleneck across a number of
commodities in the coming years.
We have become increasingly positive on the thermal coal outlook over the
next two years, and have also pushed through substantial upgrades to our
precious metals forecasts. We also continue to believe that iron ore is
undervalued regarding the longevity of prices in excess of $150/t. In base
metals, copper‟s fundamentals remain compelling, however general
preoccupation with a slowdown in the rate of demand growth means zinc and
aluminium offer better investment opportunities in the short term.
For a summary of our views on the entire base, precious, steel, bulk,
agricultural and energy commodities that we cover, please ask your sales
representative for a copy of the September edition of the Macquarie
Commodities Compendium, released alongside our new forecasts.
Latest news
Base metals prices suffered again on Wednesday, as an increase in index
fund selling impacted many. The less liquid metals were hit hardest, with lead,
nickel and tin all down around 4%. Meanwhile, copper arrested its downward
trend to close flat on the day.
As anticipated more lead metal stocks have arrived into LME warehouses in
Malaysia and Singapore. On Tuesday there was a net increase of 29,400t
(8.5%) to 374,825t, the highest stock level seen since late 1994.
The Mineworkers Union of Nambiaare threatening Rio Tinto's Rossing
uranium mine with strike action according to Reuters. The strike notice
comes over a breakdown in negotiations over output incentives, with the
stoppage slated to start on Friday. Low ore grades have seen production
from Rossing slip in 1H11 by 37.5%YoY.
Further 2011 supply downgrades were announced in the met coal market on
Wednesday. Firstly, Walter Energy lowered 2H 2011 sales guidance from
5.9mt to ~5.2mt, all due to operational issues at its mines. Alpha Natural
Resources also cut met guidance by ~0.5mt, and cited among its reasons
curtailed customer activity levels in Asia. In our view, this is not a demand
issue, more one of substitution. As decent quality Australian coal has come
back into the market, Asian demand for the high-vol crossover US coal has
waned, as the economics on a quality and freight adjusted basis do not make
sense for steelmakers. China‟s net seaborne met coal imports were a little
lower than July levels at 3.05mt, but show no significant pullback.
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