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Commodities, General discussion of commodities
early birds
post Posted: Today, 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.



 
early birds
post Posted: Yesterday, 09:35 AM
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Commodities: Gold bugs defend 1720
Gold printed a bullish engulfing day after bulls successfully defended 1720 support. Still, we’d want to see prices break above 1765 before confirming the bullish breakout on the daily chart, but the weaker US dollar suggests this could now be on the cards. On the four-hour chart a small bullish pennant is forming for a possible breakout towards 1755 and 1760 resistance.

Oil prices closed to a seven-day high, yet volatility or general direction is sorely lacking as both WTI and brent essentially move sideways inside a range.

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early birds
post Posted: Apr 9 2021, 09:29 AM
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It was a strong close for gold which now trades around 1755, very much keeping its double bottom pattern alive. Given its bullish pinbar last week and rise this week, we’ll be keeping a close eye on its potential to break above 1764 resistance here on.

Silver also notched up a bullish session although structurally it lacks the allure that gold shows on the daily chart. Still, it closed above trendline resistance on the daily chart but needs to clear its 50-day eMA at 25.68.

Oil prices remain very much range-bound at present. Despite lockdown pressures persisting, markets know OPEC will likely support prices and the weaker dollar is also providing a layer of support, yet by not enough to help it rise. Brent recouped the prior day’s losses and rose 0.35% to 63.38, just below its 20-day eMA yet just above its 50-day. WTI was -0.28% lower for the session but closed just above its 50-day eMA, around the centre of it 57.25 – 62.27 range.

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all TA stuff,

 
early birds
post Posted: Apr 6 2021, 09:02 AM
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Global iron ore and Chinese steel prices are set for a shaking over the next month as the government kicks off a surprise inspection of steelmaking facilities that will check companies’ adherence to pollution control measures and steel-making capacity reductions agreed to as far ago as 2015 and 2016.

News of the month-long checks emerged late last week and will see inspectors inspecting steel making firms and their operations in eight provinces.

The inspections are likely to carry more force than those in previous years in the wake of the capacity cuts and output reductions handed out to more than 20 producers in Tangshan last month.

Chinese media say inspectors will visit Shanxi, Liaoning, Anhui, Jiangxi, Henan, Hunan, Guangxi and Yunan provinces to ensure that steelmakers are continuing to meet environmental protection policies and reducing emissions as well as checking the performance and implementation of capacity reduction in major industries with high pollution and high energy consumption.

That means other industries such as cement making and older energy-intensive industries will also be visited.

In 2016, steel capacity cuts of 150 million tonnes were announced and supposedly implemented but rising production in 2018, 2019 and 2020 (when total production topped a billion tonnes for the first time) associated with rising smog in 2020, has led to claims that the reductions have not been fully implemented.

Staring Today (April 6) the inspections will last for a month. Similar inspections have been reported in 2019, 2018 and 2017 with little apparent impact.

China’s Ministry of Ecology and Environment started regular environmental checks in late 2015 and finished the first round on all provinces by 2018 to improve local environment and reduce runaway industrial capacity, including those in the ferrous supply chain.

Reuters reported that China’s state planning and industry ministry Thursday announced planned inspections to check on implementation of steel capacity cuts in the past few years and reiterated its intention to curb crude steel output further in 2021 to reduce emissions.

The latest inspections follow the crackdown in Tangshan (producing 122 million tonnes of crude steel a year) which saw the government order production cuts lasting anywhere from a month to the end of the year for a group of companies claimed to have breached previous pollution control measures.

While Tangshan is the economic centre of northern Hebei province, it is also one of China’s most polluted cities due to its heavy industry (especially steel, coke and sintering, oil refining and cement manufacturing). It is also a source of smog for the region, which includes nearby Beijing.

The singling out of Tangshan is why some analysts reckon the latest inspections will have a more tangible outcome in the first year of the new five year economic plan in which all sectors will be under pressure to implement policy changes and meet targets.

China has pledged to cut its crude steel output in 2021 from a record 1.06 billion tonnes it churned out last year to cut carbon emissions.

The steel sector accounts for 15% of China’s total emissions, topping all other manufacturing categories.

Analysts say it is part of efforts to ensure steel output falls this year. And that will mean a fall in demand for iron ore from Australia and other countries.

March saw the first impact on iron ore demand from the crackdown on pollution and smog problems – now the checking on capacity cuts will add to that pressure on prices and demand.

The pollution crackdown in Tangshan has seen Chinese steel mills chase higher quality ore from Brazil in preference to the usual target of 62% Fe fines from the Pilbara region of Australia.

The prices of all three types – 58% Fe, 62% fe and 65% Fe (all fines) showed the impact of the switch away from 58% and 62% Fe fines in March as the Tangshan pollution cutbacks hit hard (and forced steelmakers in other cities to take the issue of smog and pollution controls much more seriously).

While the price of all three ore types fell in March, the drop was more pronounced for 62% Fe fines and 58% – the ore products shipped by BHP, Rio and by Fortescue and Vale from Brazil.

Fastmarkets data show the price of 62% Fe fines delivered to northern China dropped $US1.43 a tonne on the final day of the quarter to $165.15.

That was down nearly $US10 a tonne from the $US175.78 a tonne in February 26. But it also left a small gain from the $US160.47 a tonne at the end of 2020 (December 31).

The price of 65% Fe fines (Ex Brazil) rose 90 cents on Wednesday to end of month and quarter at $US194.10.

That left it down just under $US5 a tonne over March, but up a substantial $US20.40 a tonne since the end of December in another strong signal that the pollution crackdown is sending Chinese steel mills in chase of higher-grade ores such as the 65% fines from Brazil.

The price of 58% Fe fines (the sort that still make up much of Fortescue’s shipments and some from Roy Hill, the Gina Rinehart mine) also suffered a hit in March and the first quarter.

The price fell $US21 a tonne in March to $US140.94 a tonne on March 31. That fall made up all the $US2.64 a tonne drop in the price since December 31 – from $US149.63 to $US146.99 a tonne.

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News of the looming crackdown saw benchmark iron ore futures on the Dalian Futures market in China rise on Friday but were down more than 10% over the week while steel rebar and hot rolled coil prices closed at record highs on supply curbs.

Iron ore trading in Asia on Thursday (April 1) saw traders ignore the crackdown news. They seemed to have responded to the jump in Chinese steel product prices and the rise in Chinese iron ore futures.

The price of 62% Fe fines delivered to northern China rose $US2.45 to $167.65 a tonne. The price of 58% Fe fines rose $3.20 to $US150.19 while the price of 65% Fe fines also rose – up $US3 to $US197.10 a tonne.
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from our own sharecafe........

 
early birds
post Posted: Mar 31 2021, 08:52 AM
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In Reply To: nipper's post @ Mar 30 2021, 09:26 AM

Commodities: Oil prices continue to coil, gold bulls fold
Oil prices produced inside days yesterday’s and their second consecutive session of indecision, where prices move higher and lower yet settle the day near their opening prices. Given the volatility of last week then it's good to see the market pause for breath. But the coiling nature of price action this week means we may be approaching another burst of volatility.

Gold prices sliced through 1700 support with apparent ease as the strong dollar and higher real yields weighed on the precious metal. A break beneath 1670 would be a significant level for bears to conquer and could invoke a stronger sell-off, assuming large stops which likely reside beneath that support level get triggered.

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just TA stuff , DYOR as always!!



 
nipper
post Posted: Mar 30 2021, 09:26 AM
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In Reply To: early birds's post @ Mar 30 2021, 08:48 AM

With the AU$ dropping, gold has tricked me into thinking its doing OK. Am still looking to go back in to PMGOLD but glad I waited

And that Suez blockage, most oil passes around the Cape in VLOC vessels; I think general cargo = container ships do the canal transit. The Ever Given was huge, right on the limit for size. Good to see the canal reopen .... would have been disruptive if it went on longer




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"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: Mar 30 2021, 08:48 AM
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Gold finally broke out its small 4-day range to the downside, sliding over -1.5% near the session low but now trades around 1711 at -1.2%. Silver also touched a 2-day low and closed beneath $25, although remains above its 200-day eMA and has several potential support levels above $24.

Oil prices are holding up quite well, considering ‘that boat’ everyone is talking about is no longer grounded. We outlined the case for prices to try and carve out a low and for brent to break above $65 if we do not see any large bearish candles o the daily timeframe

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keep eye on oil price imho, it might give a hint of market direction if the price moves clear [one way or the other]
can't see clearer now, just have wait!!



 
early birds
post Posted: Mar 27 2021, 11:36 AM
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March 26, 2021

China Ore Bust? – The Sequel

The Tangshan pollution control story continues to buffet iron ore prices and there will be more to come as Chinese steelmaker adjust imports to take account of the restrictions chopping more than 30 million tonnes.

The impact on Australia is prospective at this stage, but there has been a noticeable slid in the value of iron ore exports from December to February, driven by lower volumes in January and February and lower prices last month.

The fall is a hard to ignore 33% or so, or $4 billion in lower export income.

Now the doubts about the situation in Tangshan could add pressure on volumes in coming months.

Just how much will eventually be cut remain to be seen, as the brawl over pollution could very well be a power struggle between steel companies and local authorities in Tangshan.

Tangshan accounts for around 144 million tonnes of crude steel output a year – about 14% of China’s annual output in 2020, so it has a substantial impact on iron ore demand.

From what’s happening in futures and in the daily markets in Asia, the price of 62% Fe fines is coming under greater pressure than that for the 65% fines (which come mostly from Brazil).

That’s due to the preference of steelmaker at times of pollution problems to buy higher quality iron ore for its greater yield and lower sintering requirements.

The premium between 65% Fe fines ($US189.20 on Wednesday) and 58 Fe fines (145.71) was around $US42 a tonne – that was up $US3 a tonne from the previous Wednesday when the Tangshan story started breaking and an indicator of the higher demand for 65% ore. In fact the price of 65% ore edged up 90 cents a tonne on Wednesday of this week while the price of 62% fines dipped by 3 cents a tonne.

Thursday saw a repeat – a fall of $US1.54 a tonne in the price of 62% Fe fines to $US159.85, but a rise of $US1.20 a tonne for 65% fines to $US190.40.

That’s an important indicator of changing demand patterns in China at the moment and hints at emerging downward pressures on the price of our key export product, 62% Fe iron ore fines to China.

That switch to 65%% Fe fines (they are not as plentiful as the 62% fines from Australia or parts of Brazil) helps explain why Fortescue Metal’s share price had been hit hardest of the three major miners (BHP and Rio are the other two).

Fortescue shares are down 4.4% in the past five days and more than 23% in the last month. Rio shares are down 2.5% in the past five days and 16% over the month while BHP shares are off only 1.7% and 11% in the last month (BHP has coal, oil, copper to cushion itself against weaker iron ore prices, Rio has copper (and some aluminium), Fortescue is a pure iron ore play selling 58% to 60% fines that are not as desirable as they were in late 2020.

Australian iron ore exports are down more than 12 million tonnes in January (7.2 million) and February (down 5.2 million tonnes). The impact of the fall in volumes has been disguised by the high prices compared to a year ago. The fall in the value of iron ore exports in February was mostly due to the lower volumes.

The value of iron ore exports to China was $8.531 billion in February, down from $9.665 billion in January and $12.510 billion in December which was the all-time high.

That means the value of iron ore exports has fallen by a third from December to February with the drop in volumes to China playing a major part.

Meanwhile world crude steel production in the member countries (64) of the World Steel Association (worldsteel) rose 4.1% in February to 150.2 million tonnes from February 2020 (when the pandemic hit Chinese production hardest of all).

China is estimated to have produced 83.0 million tonnes in February 2021, up 10.9% on February 2020 (and 175 million for the first two months of the year).

Indian production fell 3.1% to 9.1 million tonnes (Mt), down 3.1%. Japan produced 7.5 Mt, down 5.6%. The United States produced 6.3 Mt, down 10.9%. Russia is estimated to have produced 5.7 Mt, down 1.3%. South Korea produced 5.5 Mt, up 1.2%. Turkey produced 3.0 Mt, up 5.9%.

Germany produced 3.1 Mt, down 10.4%. Brazil produced 2.8 Mt, up 3.8%. Iran is estimated to have produced 2.3 Mt, up 11.5%, according to a truncated report from the World Steel Association.

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it's from our own sharecafe

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It appears that the giant ship blocking the Suez Canal is going to be stuck for a lot longer. Even with an elite team trying to extricate it, experts said the earliest the boat may move is next Wednesday—much longer than initially feared. The longer the blockage lasts, the more it disrupts global supply chains and threatens to increase prices. Reverberations from the shutdown may be felt for months after the mess is cleaned up. Already, oil tankers are rerouting and major companies like Ikea and Caterpillar foresee potential delays. One shipping executive summed it up: “If it can’t be resumed in a week, it will be horrible.”

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from bloomberg




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early birds
post Posted: Mar 26 2021, 07:32 AM
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oil went down with other commodities, as USD firmed up again!!

so tread them with caution . can't see clear direction, although inflation expectation is up, but hasn't reflecting into commodities?? unsure.gif





 
early birds
post Posted: Mar 25 2021, 08:59 AM
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Commodities: Oil rebounds, gold bears lack follow-through
Oil prices rebounded and recoupled most of Tuesday’s losses after oil vessels were grounded in the Suez Canal, adding delays and possible supply disruptions. Stronger PMI data and consumer confidence across Europe also0 helped sooth fears of lower demand in H2, despite some parts in Europe now back in lockdown. WTI is back above $60 (just) and posted an impressive +5.3% gain. Given it sliced through 59.24 resistance and its 50-day eMA with apparent ease, our bearish bias has been shelved although we’d want to see a break above 63.13 before assuming bulls had fully regained control.

Brent’s rebound was less impressive, although its sell-off on Monday was also less severe and, unlike WTI, did not close beneath its 50-day eMA. Ultimately price action on oil now appears a little ambiguous on the daily charts so we’ll step aside until the picture becomes clearer.

Gold prices are effectively moving sideways within a tight range. We had been looking for bears to regain control following a bearish engulfing candle seemingly breaking out of a triangle but, due to a lack of bearish follow-through, we’ll also step aside for now as it direction appears fickle.

Silver provided the move we had hope gold would perform; it went down. Now trading around $25 its downside potential may be limited or staggered due to key swing lows residing at 24.07, 24.35 and 24.70.

A small bullish candle has formed on palladium’s daily chart after a brief retracement against its aggressively bullish breakout. A break above 2657.50 assumes bullish continuation.

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saw the news that giant ship in the Suez canal has been turned , seems the problem has been fixed!! so ...oil might be heading down again?? unsure.gif




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