Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Sunday, 5 October 2014

Short Hedland?

Dampier dampener?

The Port Hedland Port Authority released its export statistics for September which will be reported cautiously as a "decline", although volumes remain exceptionally high on a historical basis.

29.8 million tonnes of iron ore was shipped to China in the month, which is indeed a little below the record 32 million tonnes shipped in August (although if I remember my childhood mnemonic rhymes correctly fewer days hath September than hath August).

There was something on an increase in iron ore shipped to Korea, Japan, within Australia and Singapore in the month.

In terms of what this might indicate for Australia's quarterly national accounts, total iron ore cargo tonnage shipped in the quarter from Port Hedland was more than 5 percent greater than in the preceding quarter, continuing the strong uptrend.

However, iron ore exports doubtless achieved a significantly lower price this quarter than they did in Q2. Port Hedland also exports relatively immaterial quantities of other minerals, but commodity prices are generally weak.

As you can see from the above chart, in previous years the iron ore spot price has rebounded through October as it did in 2009, 2010, 2012 and 2013 (it didn't rebound in 2011 as prices were still cascading lower from their bubble peak). 

Although the Australian dollar has now declined, iron ore prices have been trounced by around 40 percent in 2014, while on a quarterly basis tonnages exported are about 30 percent higher than the prior year.

The players at the big end of town including BHP Billiton (BHP) and Rio Tinto (RIO) may be expecting that lower prices could shake out some of the marginal producers, as I looked at briefly here.

Depending upon which source of data you take, China's mills appear to remain relatively well stocked with finished product steel, implying that demand could remain weaker and any iron ore price rebound in 2014 could be more muted than the exporters hope.

A Bloomberg survey of economists expects China's economy to grow by 7.3 percent this year, which is a little lower than the preceding survey which called for a 7.4 percent expansion.