Commodities

As the uneasy truce between Washington and Tehran continues to mostly hold overall, Iran continues to attempt to throttle traffic through the Strait of Hormuz in order to maintain a greater degree of it’s negotiating leverage.

Steel prices are falling in the wake of the war on the prospect of resuming Gulf volumes.

Spewing, I missed this move lower thanks to the Iran War, but headwind seasonality is growing short, so I won’t chase it.

Shell chairman Andrew Mackenzie says the global energy crisis and instability in the Middle East could create a major opportunity for Australia’s LNG industry, as global buyers seek to diversify supply away from the Gulf region.

The ferrous complex is weak.

Since the flow of trade through the Strait of Hormuz was reduced to a trickle at the start of the U.S.-Iran war as February drew to a close, China and the United States have been effectively acting as Atlas, holding up the world of global energy supplies.

Iron ore has fallen 10% in recent weeks.

As we know, the Pilbara killer (Simandou) is pumping iron ore faster than anyone expected, to 2.2mt in May, suggesting that by year-end it could be in the 30-40mt annual range as locomotives arrive en masse.

According to ship tracking data from Kpler, shipments from the project’s Morebaya port reached 2.2 million tonnes during the month, far more than the record of 1.3 million tonnes set in April.

As the world continues to attempt to come to grips with the loss of somewhere around 13 million barrels per day in oil, fuel and condensate supplies that normally transit the Strait of Hormuz, there has been an unexpected guardian angel acting in the world’s favour and at its own expense: China.

The ferrous complex has come off but remains very elevated.

It’s been obvious that the ferrous market has been levitating for months.

The ferrous jaws are open.

The ferrous jaws are as wide as ever.

Are Supply Chains Breaking Again?

Iron ore is printing money, though I’m blowed if I know why.

For no sensible reason, iron ore is threatening to break out to its highest point in two years.

The Chinese PMIs were a mixed bag, but overall showed a slowing economy.

As part of its recent first-quarter Energy Survey, the Dallas branch of the U.S.

Steel prices have been rising, which does not make much sense.

Shortly after the war in the Middle East began and traffic through the Strait of Hormuz was reduced to a relative trickle, the flow of global jet fuel exports was swiftly roughly halved, as flows from the Persian Gulf ceased and the impact of China’s near-ban on fuel exports began to bite.

Over the last 60 years, the amount of oil required to generate $1,000 worth of GDP output has fallen by approximately 94.2%, from 5.3 barrels per dollar in 1965 to 0.3 barrels in 2024.

The iron ore jaws are wide on the war.

When the Germans began their push towards Stalingrad in June 1942, the bombing campaign on the city by the Luftwaffe was a significant element in the strategy to secure the city that bore the name of their enemy’s leader.

The ongoing conflicts in Ukraine and the Middle East are doing more than reshaping geopolitics—they are forcing nations to rapidly accelerate their move away from fossil fuels in the name of energy security.