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Commodities, General discussion of commodities
early birds
post Posted: Jun 3 2021, 09:00 AM
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Chinese Whispers Send Ore Prices Skyrocketing

Reports that authorities in Tangshan, one of China’s major steel producing centres, are talking about relaxing tough rules brought in last April to cut pollution and smog emissions from the city’s huge steelmaking sector have sent iron ore prices soaring for a second day.

FastmarketsMB said the price of all three grades of ore – 62% Fe fines 58% Fe fines and 65% Fe fines rose more than 4% on Tuesday after similar rises on Monday.

That saw the prices of the three big iron ore exporters enjoy a good day and help drive the ASX 200 up by 1% to a new closing high.

BHP shares rose 3% to $49.30, Fortescue shares rose 2% to $23.28 and Rio shares closed at $126.96, up 1.8% but were over $128 at one stage in the session.

Other reports suggested that some capacity cut ideas might be eased, while other reports said the operation of Basic Oxygen Converters (BOS) operations at steel mills (which convert the pig iron into crude steel) might be exempted from the crackdown on pollution as they are not big emitters.

Sintering plants, coke ovens and blast furnaces emit more pollutants, according to reports.

Reuters reported that pollution and capacity cuts are still being discussed in the government.

Iron ore prices reached $US208.67 ($268.72) tonne for 62% Fe fines. That was a rise of $US9.84 a tonne or more than 4.5%. The price of 58% Fe fines rose $US8.15 or more than 5% to $US181 a tonne. The price of 65% Fe fines were up less than 3% (or $US7.10 a tonne) to $239.90 a tonne.

That still leaves prices $US25 to $US30 a tonne short of the all-time highs reached on May 12.

The production cuts were in response to the Tangshan government’s crackdown on steel mills, with the aim of cutting pollution levels and halving China’s emissions.

Fastmarkets and Reuters reported that the municipal government of Tangshan – China’s steelmaking hub in the north of the country – is reported to have suggested that basic oxygen furnaces no longer come under production restrictions due to the low level of pollutants that they emit.

In a notice released late on Monday May 31, it also suggested a relaxation of the rates of emissions cuts by steel mills in the city to 20-30% from the more stringent 30-50% currently in place.

The larger cuts were announced in April amid a lot of song and dance from local and central government departments and officials and the reports of backsliding might indicate the changes are not written in stone in Beijing and some slippage could happen – which could be bullish for iron ore prices and demand.

It suggested the rate for Chunxing Special Steel, Tangshan Plate, Donghua Steel, Xinda Steel and Songting Steel to be lowered to 30% from 50%, and for another 15 steel mills’ emissions reduction rate to be lowered by 20%, instead of 30%.

This is in line with the central Chinese government’s proposal of using market-oriented methods to cool down red-hot commodity markets, including steel, Fastmarkets reported.
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from our own sharecafe




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early birds
post Posted: May 20 2021, 09:46 AM
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Commodities: Oil weaker on multiple fronts, gold shaken at its highs
Well, there was no major announcement of US rejoining the nuclear Iran deal as speculated by a Russian Ambassador. Yet it didn’t prevent oil from falling due to several drivers; broader risk-off sentiment, a stronger dollar, concerns of a potential Iran deal, falling demand from China and rising coronavirus cases in Asia.

WTI futures fell over -3% and to a three-week low before finding support at $62.00. Brent futures fell -3.25% and closed beneath trendline support on the daily chart.

It was a volatile yet, ultimately, directionless session for gold after a false break above 1875 resistance was quickly reversed and the day closed with a wide legged Rikshaw Man Doji. The stronger dollar certainly played its part but its failure to close above key resistance should warn bulls that a corrective phase could be due – just one day after Silver.

Silver’s bearish pinbar on Tuesday was confirmed with yesterday’s sell-off back towards 27.0. It remains within a bullish channel, in line with our core view, but we need to see volatility subside before reconsidering longs.

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only silver is my bullish bet. think of silver will out perform all other majors next few months!! imho



 
early birds
post Posted: Apr 30 2021, 09:13 AM
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Commodities: Oil extends its lead, gold falls from 200-day eMA
Oil extended its lead to a six-week high on higher oil demand forecasts and positive economic data. WTI currently trades around 64.80 and its next resistance levels are 66.40 and 67.98, whilst next major resistance for brent is 70.0.

It was a volatile session for gold, initially rising to test its 200-day eMA but falling over 1% due to rising yields and stronger economic data. Whilst our core view remains bullish, yesterday’s bearish outside candle pierced 1760 support, so we’d prefer to step aside until volatility subsides.

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oil looked strong even with weekly chart.... ... shake my head.



 
early birds
post Posted: Apr 28 2021, 10:10 AM
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The boom in iron ore prices continues and South Korean steelmaker Posco on Monday provided a good explanation as to why that is happening – business is going very well indeed for one of the world’s major steel companies.

The company confirmed updated guidance issued in March that it earned $US1.39 billion in the March quarter on revenue of more than $US18 billion. That was almost double the $US635 million earned in the first quarter of 2020.

It was the company’s highest quarterly profit since the second quarter of 2011, as steel prices rose sharply due to demand outpacing supply and the surge in iron ore costs as well.

The world’s fifth-biggest steelmaker said first-quarter operating profit surged 120% as “profit from all sectors, such as steel, global and infrastructure, and new growth, improved”, including a 12% sequential jump in the price of its basic carbon steel product.

Posco buys a lot of iron ore from Australia and Brazil and hasn’t been averse to paying the near record prices of more than $US180 a tonne for the 62% fe fines product from Australia or the 65%.

It owns 12.5% of the Roy Hill project in the Pilbara (now the world’s fifth largest iron ore company) and buys more than 6 million tonnes of ore a year based on its shareholding.

It buys millions of tonnes of metallurgical coal from Australia as well – more than 25 million tonnes a year.

It has invested close to $5 billion in mining operations in NSW and Queensland (met coal) and iron ore in WA (Roy Hill). In 2019-20 it bought around $8 billion worth of mostly coal and iron ore (the value is running much higher this year because iron ore prices have more than doubled in the past year).

In an earnings call, Posco said it expected steel supply from Australia, Brazil and South Africa to rise in the second half of the year after falling in the first quarter.

It said steel prices were likely to stabilise gradually compared to the first half as demand was expected to fall slightly because of output cuts in China due to tougher environmental curbs.

Global steel demand is expected to grow by 5.8% this year, higher than the 4.1% estimate from last October, as economies recover from the COVID-19 pandemic, fuelling demand from the rebounding auto and construction sectors, the World Steel Association said this month.

The story is the same in China – strong demand, high economies of scale and solid pricing means record or near record profits and the ability to pay more for iron ore from Australia and Brazil, which means big profits for BHP, Rio Tinto, Fortescue Metals, Roy Hill and Vale from Brazil.

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from our own sharecafe....

 
early birds
post Posted: Apr 27 2021, 09:47 AM
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Commodities:
Oil prices are refusing to break higher, yet both WTI and brent futures have reaffirmed their support levels. Rising coronavirus cases in India are weighing on prices, but not by enough to send prices lower. Perhaps the US supplying vaccine doses could help prices break higher in due course.

Gold produced a small bullish hammer yesterday and prices remains above the untested 1760/65 support zone. Our bias remains bullish above this level and the next target remains at 1835, projected from the double bottom pattern from 1676.

Silver remains in a corrective phase in a bullish channel and printed a small bullish engulfing candle yesterday. Our bias remains bullish above the 25.50/62 support zone.

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wondering where is all these bullish steam come from?? unsure.gif

 
nipper
post Posted: Apr 26 2021, 09:52 AM
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In Reply To: early birds's post @ Apr 26 2021, 08:27 AM

Copper starred in commodity markets last week as a weaker US dollar added to continuing demand and improving market fundamentals. Comex copper topped $US4.33 a pound; the highest it has been since August 2011 and moving past the previous nine year plus high hit in early March around $US4.29 a pound.

That left copper up 4% for the week and more than 23% for the year to date. A year ago it was down around $US2.17 a pound (March 22) in the midst of the first pandemic lockdown.

Since then recovery activity .... first in China, then elsewhere, and now the US has added to demand for the metal from the rapidly growing renewables sector for vehicles, power transmission, wind farms and wiring.

As well strong home building activity in developed economies , especially in the US, Australia and now China, has added to demand and drawn extra output from producers.

Globally, the copper market has moved into a small surplus as more production emerges (that’s after the big deficit for calendar 2020 because of a sharp Covid driven fall in output in Peru especially).

The global world refined copper market showed a 28,000-tonne surplus in January, compared with a 1,000 deficit in December and a 34,000 tonne deficit in the year-earlier quarter, the International Copper Study Group said in its latest monthly bulletin.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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early birds
post Posted: Apr 26 2021, 08:27 AM
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As copper is an industrial metal, the price of copper is said to show the health of the world economy. A strong copper price shows that the economy is strong and will be growing in leaps and bounds. A weak copper price shows that the economy is frail, and the world economy may be contracting. As a result, the commodity has received the nickname “Doctor Copper”. Copper has been in a strong uptrend since putting in pandemic lows in March 2020. On February 23rd, the metal took out all time highs near 4.19, only to pullback 2 days later. Price pulled back to the 61.8% Fibonacci retracement level from the lows of February 2nd to the highs of February 23rd, just above 3.83. In doing so, copper formed a rounded bottom in an uptrend. Copper is testing the February 23rd highs of 4.3645, currently trading at 4.336. If price holds the resistance, first support is the highs from 2011 near 4.1904. Below there is an upward sloping trendline from October 2nd, 2020 near 3.97. If price holds either of these support levels and then moves higher, it will form a cup-and-handle pattern. The target for a cup-and-handle formation is the height of the “cup” added to the breakout point, which would be near 4.85!

With more central banks meetings this week, bigtime tech earnings, and continued increases in coronavirus cases in many parts of the world, this week will provide traders with tons of information. Throw in recent strong economic data, end of month price action, and stocks near all time highs, and markets may see some volatility heading into May!

Have a great weekend and please remember to always wash your hands.

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thought there will be a lot less of "Dr. copper", more of "Dr. oil" these days. but still people put doctor copper as major indicator..... ohmy.gif

 
early birds
post Posted: Apr 22 2021, 10:47 AM
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Commodities: Metals higher on a weaker dollar
Metals were mostly higher on the back of a weaker dollar, with silver rising +2.6% to a five-week high, and silver closing just above its 200-day eMA yet closing below 1800 after a +0.94% gain. Copper closed to its highest level since late February and palladium closed to a new record high.

Oil prices were lower again as a rise in covid cases continues to weigh on expected demand, with brent futures down -2.3% and WTI falling -1.75%.

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think of silver is good bet for some times by now!! ohmy.gif

 
early birds
post Posted: Apr 20 2021, 10:02 AM
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Despite a weaker US dollar, gold (-0.36%) failed to hold onto earlier gains and found resistance at its 200-day eMA. Given the significance of this technical level and the two-bar reversal at it, we suspect a retracement is now due before it tries to break above 1800.

Silver (-0.56%) also struggled to retain last week’s bullish momentum but has found support above its 50-day eMA. Given the 50 and 20-day eMA reside at 25.66 and 25.47 then we suspect this band of support could hold prices up for now.

Oil prices remains in a tight range near last week’s highs, after breaking above key resistance levels last Wednesday. WTI rose 0.4% and traders at 63.38 whilst brent was 0.5% higher ad settled at 67.11.

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early birds
post Posted: Apr 15 2021, 10:01 AM
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Commodities: Oil prices rally on higher demand forecasts
The International Energy Agency (IEA) said fundamentals for oil “look decidedly stronger”, that vaccine rollouts have improved the outlook for oil demand and oil inventories built up during last year are depleting. Furthermore, crude inventories fell nearly 6 million barrels last week which shows there is some hard data coming through to support the outlook.

Oil prices finally broke out of range with WTI future (+4.3%) closing above 62.27 resistance and brent futures (+4.1%) closing above 65.50 resistance. In a weaker dollar environment with supporting fundamentals, it appears increasingly likely that prices have reverted to their bullish trends.

Gold and silver failed to take advantage of the weaker dollar. XAG/USD needs to break above 25.50 before we can assume bullish continuation on the daily chart, whilst gold remains stuck below several key levels of resistance between 1750 – 1765.



 
 


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