schminkie

The Burst Commodities Bubble

i'm short mos and look forward to some decent returns, tomorrow most likely. i'm thinking - always dangerous - that tomorrow, 10/10, will be a day of hard selling. who wants to be long going into a weekend?

Vale Pushes China for Higher Steel Prices

oh yeah, i'm long coal iron ore dry bulk shipping and sid, a more vertical steel outfit.

Vale Pushes China for Higher Steel Prices

yeah it's the distance that the aussies base higher prices on; considerably higher.

china has been sending a lot of cues out to miners, building a negotiation posture, like a 'woe is me' scenario. someone there has made it known that they may remove baosteel from its position as the ore contract negotiator. they didn't like their work this season. its price fixing but it seems that this is s.o.p. with miners in asia. in fact too is unhappy with their deals and claims they will negotiate separately next year and play the contracts against the spot market which is pretty typical. there're a few other things that make me see a lot of news as posturing.

actually bhp wants more per tonne and think they got stiffed this year on ore contracts having to go along with deals cut by rio tinto. the nearly double price is insufficient. and so what i see is a heavy dose of saber rattling mixed in.

by the way, all this has driven industry components into building in verticality so they just have to depend on themselves for materials. i think THAT is the real story.

here's a question. with talk of inflation, slow downs, deflation, high oil,
low nat gas etc etc rampant, why are huge companies like rio and mt buying companies like popcorn?? i guess they're pretty stupid and somehow stumbled upon ways to grow; the 'even a blind squirrel finds a nut now and then' theory. maybe they didn't read the news lately? yeah real dumb they are...

Recent World Events Are Bullish for Metals

i think your coal analysis is not really on the mark. first of all different types of coal have different functions in industry / economy and have different rates of scarcity. everything i see says that as long as steel demand persists the demand for metallurgical coal will exist and that is the scarcest coal and/or the hardest to mine, transport, etc. as long as power generation climbs coal use will climb. notice that several coal producing nations are trying to stop exports with extreme tariffs.

the quality of coal varies a lot. it seems that some of the largest unmined sources are in the powder river area. this coal is not of high quality and is costly to move, esp abroad.

i admit some things driving coal up will abate; i refer to the weather damage in australia which was severe. however the demand for coal per steel and per good quality coal for electricity, steam will maintain. demand is in fact a great deal more than supply vis a vis specific as above. large numbers of coal users including in the u.s.a. are scrambling.

i think a more interesting question is that of an agenda to unify dry bulk shipping, coal, iron ore and steel production within the same company [see SID of braqzil} this begs many interesting angles to study.

finally eskom. i have never been to s.a. reading several s.a. papers however i get the distinct impression that eskom is the victim of bureaucracy and stone-dense stupidity, shortsightedness and dismal failures in planning. to me it looks as though the chiefs of eskom did not buy coal for the future generation of power fearing looking bad given that high cost of coal would be beyond estimates and would cause a deficit and no doubt criticism from the government, threatening job security at eskom upper management. looks like while coal was rocketing into record costs these guys were in their hot tubs. just a surmise on my part but i feel like i am thinking in the right direction.

don't be surprised if the government cedes new consessions to foreign mining investors in particular. these are branches of huge multinational corps. perhaps such firms would even spend money to prop up eskom just to be able to function.