Ending of China's Super-boom Spells Pain
A decade-old commodity boom came crashing to an end in 2015, hurting energy and mining companies and punishing prices as China's industrial rise and appetite for raw materials slowed. The outlook for 2016 is not much better. The Thomson Reuters Core Commodity Index fell by a quarter over the year to hit its lowest level since 2002 in December, as commodities ranging from iron ore to oil took a battering. "The chances of an optimistic 2016 are bleak," Mark To, head of research at Hong Kong's Wing Fung Financial Group, said. Further interest rate hikes by the U.S.
China's Slowdown Spells Commodity Pain for 2016
Thomson Reuters Commodity Index hits lowest since 2002. A decade-old commodity boom came crashing to an end in 2015, hurting energy and mining companies as China's industrial rise and appetite for raw materials slowed. The outlook for 2016 is not much better. The Thomson Reuters Core Commodity Index fell by a quarter over the year, to hit its lowest level since 2002 in December, as commodities ranging from iron ore to oil took a battering. And there are few bright spots in sight. "The chances of an optimistic 2016 are bleak," Mark To, head of research at Hong Kong's Wing Fung Financial Group, said. Further interest rate hikes by the U.S.
Australia Tightening Grip Grip on Coking Coal Markets
Australia is set to boost its dominance of the global trade in steel-making coal, as cost cutting and better margins due to a slide in the local dollar stoke a rise in production and put pressure on U.S. rivals to cut output. Top exporter BHP Billiton , which along with Japanese partners Mitsubishi Corp and Mitsui & Co supplies nearly a quarter of globally traded coking coal, will be the biggest beneficiary. "As China's import flows stabilise and higher-cost North American production exits, BHP Billiton will be left as the dominant price-setting player on the supply side," Morgan Stanley analysts Tom Price and Joel Crane said in a note.
China Imports add to Slowing Growth Narrative
If the state of China's economy was to be judged solely on the strength of imports of major commodities, it would be a reasonable conclusion that things were pretty much fine. April imports of crude oil hit a record high, iron ore imports were slightly down but the year-to-date figure is still in positive territory, and copper arrivals increased from the prior month. But look a little further into the figures and concerns start to arise, perhaps not to the extent that China's economy is in deep trouble, but enough to suggest growth may be slowing more than the authorities may want.
Iron Ore Miners, OPEC on Same Path
One of the themes from the recent weakness in crude oil and iron ore is that major producers are deliberately oversupplying as they are willing to tolerate falling prices in order to drive market share. This sounds logical and provides a convenient explanation as to why output of these two major commodities has continued to rise even as prices fall to multi-year lows. But there are problems with suggesting that the big three iron ore miners, Brazil's Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton , are on a parallel track with Saudi Arabia and others in the Organization of the Petroleum Exporting Countries (OPEC).
Walter Energy to Idle Canadian Coal Mines, Cut 700 Jobs
Coal miner Walter Energy Inc said it would idle its operations in Canada and temporarily lay off about 700 workers as it struggles with weak prices. Walter's shares, which have fallen nearly 70 percent in the past 12 months, rose as much as 5.7 percent in early trading. The company said it would immediately stop production at its Wolverine and Willow Creek mines in British Columbia, while its Brule mine in the same province would likely shut down by July. The company said it would continue to operate preparation plants at the mines to complete processing of stockpiled coal.
James River Coal files for bankruptcy protection
Firm to enter into a $110 mln debtor-in-possession financing facility; continue evaluating alternatives such as sale of one or more parts. Shares slump 41 pct in extended trading. James River Coal Co filed for Chapter 11 bankruptcy protection after struggling with a steep drop in prices and demand for both thermal and steel-making coal. James River shares plunged 41 percent to 42 cents in extended trading on Monday. "The coal markets in the U.S. have changed dramatically during the past several years," Chief Executive Peter Socha said in a statement. U.S.
