Interesting YoY data revealed here from the ore markets and a large Brazilian multi-national.
The Brazilian miner sold its iron-ore fines at an average $46.48 a wet metric ton, down from $68.02 a year earlier.
Selling prices for nickel slumped 40 percent on the year,
The more than 20 percent decline of the Brazilian real in the third quarter prompted a foreign exchange and swaps losses of $6.22 billion while the company also recorded a $530 million loss on the hedge of the bunker oil used to ship the ore.Real has lost about 40% over the last year while iron ore is down about 30%, nickel down 40%.
For this firm, even though it seems they had some forex hedges on, they are still reporting losses of over $6B in the forex. Maybe they thought higher policy rates in Brazil would support the currency while at the same time they were lowering the prices of their produce in USD terms thus fomenting the devaluation of their currency vs. USD. If so might have cost them over $6B.
Top #ironore miner reports drop in quarterly earnings as prices slump https://t.co/AlMFWjax2z via @jpspinetto pic.twitter.com/JbpyQ1YI7U
— BN Commodities (@BNCommodities) October 22, 2015
4 comments:
Plastic, steel, chemicals, food, lumber, commods. all getting cheaper at the wholesale level every day. All near crisis lows. That should keep downward pressure on consumer prices. Hard to believe in FOMC/Yellen's BS model of "medium term" inflation based on opinion surveys and expectations while real prices are weak. The congressional idea that tight government fiscal policy is somehow boosting private sector is crazy the so called automatic stabilizers are anything but with a 0% social security increase this year as a result of low inflation, stabilizers are pro-cyclical program rather than counter-cyclical.
I understand a larger private sector and smaller government is a political decision for elected leaders to make, but given the lackluster growth and dreadful productivity numbers, the Republican congress and the Democrat POTUS need to match their smaller government policy with tax cuts if they really want to do this.
Ryan if you read it, sounds like they have opened a big new super productive mine and are shuttering the old less productive ones... this is probably a trend across many industries... could portend even lower prices if we dont get the needed fiscal adjustment you point out...
I dont see the Obama-Ryan axis delivering on any real fiscal support short term... only hope still is higher rates fomenting increased interest income and transfer program demographics.. ... perhaps a Trump Mr Magoo fiscal policy further out...
Ryan people who barely pays taxes or does not pay taxes at all don't benefit from tax cuts (unless they implement a negative income tax of sorts, ie. an UBI by other name). That mantra won't work either at some point.
the people who needs to spend cannot spend what they don't have, this is hard to get by politicians. The same as you cannot get jobs that don't exist.
Is all silly...
Depends where you're at perhaps. In US, 90+ percent of people are working, and we have a regressive payroll tax that could be lowered progressively.
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