China's great environmental clean - up is starting to produce knock - on effects in Western Australia, with none more interesting than the «quality clash» in
the iron ore sector.
Fortescue Metals Group has ended a tough week for
the iron ore sector by halving its projected capital expenditure for the 2015 financial year to $ US650 million, in response to the continued weakening of the iron ore price.
FEATURE: A stubbornly high dollar, falling prices and high operating costs are combining to exert real pressure on smaller players in
the iron ore sector.
But
the iron ore sector escaped lightly compared to the Queensland coking coal industry, which was significantly disrupted in April when Cyclone Debbie destroyed parts of the rail network that carries coal from mines to the ports.
Our interest was heightened due to our long study of the inventory cycle («Making Volatility our Friend: Trading the Kitchin Cycle,» 5/28/14), which was the «surprise» catalyst that worked to depress equity and commodity values not just in the steel and
iron ore sector, but globally across sectors as diverse as crude oil («Crude Oil's Black Friday,» 12/3/14) and other commodities.
It should be all but obvious to even a casual observer that the turn in
the iron ore sector is much further off than it is for cobalt, for example.