Good afternoon
following yesterday´s extremely strong settlement of 1.Qu 2017 coking coal prices, and a new high for iron ore at nearly 84 US$/t, the market today has decided, that this is as good as it gets. And in many, regards, the market is probably right.
Mining stocks are a weaker across the board today in London - some strong profit taking around. The same in metal prices today, which were strong in the morning, and are seeing some selling this afternoon - I guess mainly from the States.
Earlier, these markets had profited from good economic numbers in China: Industrial production up by 6,2 % ( vs 6,1% exp ), Retail Sales up by 10.8%, Fixed Asset Investment up by 8.3%. But all these numbers do not justify coking coal at close to 300 US$, and iron ore at the current, amazing levels. Steel production is not keeping up with strong imports of raw materials - some de-stocking seems inevitable, or at least, lesser demand over the next few month. I think market participants have prepared for the wet season in the North of Western Australia, and Queensland - and weather looks to be the only escape for these raw materials to stay up here.
Gold stocks in Australia have been weaker across the board, once again. The trend seems firmly entrenched - probably little in the way to stop it in 2016 - we will look again early in the new year, when Trump will have to fullfill some of the current, bullish sentiment for the economy with action!
The pricture might look a bit different for the base metals, which prices are probably more realistic. But they are also subject to financial flows - and tehy have undoubtedly been very positive, since Trump won the elction. Perhaps also time to see some consolidation here. I just hope, that our smalelr companies´share price don´t go down now - not having gone up by as much as they should have previously!!
I fear there is very little to report from the micro-front today!
Kasbah - an Australian court dismissed the merger of Asian Mineral Resources and Kasbah Resources today. Well, the tin price has moved 20%, since the company entered into merger talks with ASN...and the market enviroment is much more positive now. This could actually be a positive failure for Kasbah - negotiations will ahve sto start again, I guess.
have a nice evening
WS