Archives of “September 28, 2020” day

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Australian government forecasting the price of iron ore to remain elevated

  
  Analysis

Australia’s Department of Industry in its latest assessment of commodity exports, prices.

  • Expects the price of iron ore to remain high for the next two years
  • Also expects Australia to become the world’s largest gold producer
  • Exports of commodities expected to be upwards of 250bn AUD in the year ahead
  • department is effectively predicting a benchmark iron ore price of about $US93 per tonne in mid-2021.
Further:
  • expects continued disruption to Brazil’s ability to supply iron ore
  • ”Significant growth in Brazilian short term supply remains unlikely due to the wider problems of COVID-19 across the Brazilian economy”
  • ”The main risk to prices is thus on the demand side.”
  • The department predicted iron ore would hold around $US100 a tonne “over coming months” and would gradually decline to be closer to $US85 a tonne by June 2021.

Oil trader Vitol says prices have little room to rise in the next quarter because global demand growth is faltering

  
Analysis, Crude

Weekend comments from Vitol Group executive committee member Chris Bake.

Crude prices will have little room to rise in the next quarter
  • the recovery in global demand slowing due to new coronavirus-related restrictions on the economy
  • conventional wisdom going into the fourth quarter was that things were going to improve … It doesn’t feel like we have a huge catalyst,” and demand is more “uncertain,”
Vitol is a Dutch energy and commodity trading company.
Weekend comments from Vitol Group executive committee member Chris Bake.

War breaks out between Armenia and Azerbaijan

  
Analysis, Politics

Old conflict explodes

map of armenia-azerbaijan
Armenia Prime Minister Nikol Pashiyan declared martial law and a general mobilization after accusing Azerbaijan of “pre-planned aggression.”
The region of Nagorno-Karahakh along with some nearby districts are formally part of Azerbaijan but there have been frequent clashes since the fall of the Soviet Union in 1991, including one that killed hundreds in 2016.
At this moment, this is a non-event from markets but if Russia or Turkey were to get involved that could change quickly.
Putin expressed “serious concern” and called for a halt to hostilities. Turkey’s Erdogan said it “stand by its Azeri brothers with all its means.” Azeri is a term for Turkic Azerbaijani people.
There have been periodic attacks that recently escalated into what’s now close to full-scale warfare. The Azeri army is using tanks, artillery, missiles and aircraft against Armenian positions.
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