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).

4 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 better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent 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'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Friday, 4 July 2014

Port Hedland exports slide in June (but +21% y/y)

The Port Hedland Port Authority released its cargo exports data for the months of June.

And, for the first time in a few months, iron ore tonnage slipped back by 7% in the month to come in at 33.6 million d/mt.

Earlier in June, the port had shattered a record for the largest departure of iron ore on a single tide:

"The Port Hedland Port Authority has set a new tonnage record for the largest departure of iron ore on a single tide.
 
The new record of 1,270,721 tonnes was achieved with 7 capesize vessels departing on Saturday 7 June 2014 and beating the previous record set in April by almost 160,000 tonnes.
 
It is also the first time that seven capesize vessels have sailed on a single tide."


In spite of the decline in volumes in June, throughput has still been increasing at a searing pace over the last couple of years, and iron ore tonnage remains +21% y/y.

With cargo shipped to Japan and Korea down in the month, an incredible 88% of iron ore tonnage was bound for China and Taiwan in June (click chart):


The operations in the Pilbara have to be seen to be genuinely believed and appreciated.

It appears that the lower figure for June was due to capacity rather than any slowing demand from China (in fact, there are only 30 days in June as opposed to the 31 in May, which in itself accounts for an expectation of a 3% decline).

In spite of this, with declines in the iron ore spot price, trade data has made it increasingly clear that Q2 economic growth will not surge as a result of net exports as it did in Q1.

And thought there is still a month of retail trade data to come in, yesterday's decline in retail turnover for May suggests that there will be no growth contribution in Q2 from household consumption in either.

In short, the US economy may be firing, but here in Oz another interest rate cut is looking more likely than it was.

On the plus side, the iron ore spot price has arrested its recent dramatic declines for now, sitting at US$96.50/tonne (and with the Aussie dollar down at 93.5 cents, in A$ terms it is well above A$100/tonne).

Iron ore futures have also recovered.

A pretty good proxy for sentiment is the highly leveraged Fortescue Metals Group's (FMG) share price chart, which has gyrated around quite alarmingly at times, now bouncing back up to $4.63 by the close yesterday, up from $4.03 only three weeks ago (click chart):