According to The Australian Financial Review, the Reserve Bank could slash its key cash rate to as low as 0.5 per cent by this time next year, signalling further pain for savers and depositors but more gains for the sharemarket.
Markets are pricing in two 25 basis point cuts by the end of the year. But a growing number economists now expect the cash rate, which guides lending and deposit rates, could fall to a historic low of 0.5 per cent by next June from today's 1.25 per cent level.
As rate cut expectations grow and iron ore prices remain high, investors are piling into stocks, with the S&P/ASX 200 jumping to a fresh 11-year high last week.
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https://www.afr.com/news/economy/monetary-policy/rba-cash-rate-could-fall-as-far-as-0-5pc-20190614-p51xsg

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According to The Australian Financial Review, lithium and cobalt have ridden the battery technology boom and now it could be nickel's turn for an electric vehicle-related lift.
The price of nickel rose as much as 6 per cent overnight to $US13,030 a metric tonne in London, capping off its biggest two-day advance in five years.
Most of the nickel ore mined in Australia is processed locally into nickel concentrate by downstream smelting and refining companies.
"Australian nickel producers have been in a lot of strife in recent years, but we're starting to see the electric vehicle players begin to shore up supply," says Romano Sala Tenna, portfolio manager at Katana Asset Management.
"While the actual electric vehicles are probably two or three years away, this is extremely good for Australian producers because we have really great grades of nickel."
Nickel sulphate is a key ingredient in lithium-ion batteries, which are being installed in electric vehicles made by companies from Tesla to General Motors.
As an efficient electrode, nickel can help store power for longer. 

Ref: http://www.afr.com/markets/australias-nickel-industry-is-at-a-natural-turning-point-20171101-gzd3xf

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According to The Australian Financial Review, the spot price of iron ore extended its rally this month to 6 per cent, defiantly challenging increasingly bearish forecasts.
Ore with 62 per cent content in Qingdao ended up 3.5 per cent to $US77.94 a tonne on Friday, according to Metal Bulletin, rising for a sixth consecutive week. The price surge was paced by soaring iron ore futures traded on the Dalian Commodity Exchange.
Consensus forecasts continue to call for the spot price to retreat as this year progresses, on expectations that demand for steel in China will ease and as supplies from Australia and Brazil rise. Credit Suisse sees iron ore averaging $US70 a tonne in the September quarter before sliding to $US55 in the final three months of 2017. Citigroup, Sucden Financial, Axiom Capital Management and hedge fund Academia Capital also are bearish.
A renewed effort by Chinese authorities to shutter older, inefficient steel mills now and through the approaching winter season there has been linked to higher steel output as mills seek to capture as much profit as they can. As long as profit margins remain high for mills, they will keep producing at full speed. But with economic growth in China expected to slow, the outlook for steel is becoming somewhat more clouded.

Ref: http://www.afr.com/business/mining/iron-ore/iron-ore-defiantly-surges-towards-us78-a-tonne-20170818-gxzss2

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According to The Australian Financial Review, construction activity expanded in July as commercial work grew at its fastest pace in 12 years and detached house building also sped up, the latest Performance of Construction Index showed on Monday.
"The long-awaited pick-up in commercial construction seen over the past three months is particularly welcome in light of the anticipated wind-down in apartment building from the very high recent levels and suggests that the national construction industry will continue to play a leading role in the economy for some time to come," Ai Group head of policy Peter Burn said.
The report, which also showed house-building activity rose by 3.4 points to a 3½-year-high of 62.4, is good news for construction, as it shows that the slowing housing construction sector is being offset by other areas of construction, notably commercial and engineering work.
Approvals of new dwellings fell 8.1 per cent to 219,219 in the year to June from a year earlier, official figures last week showed.

Ref:http://www.afr.com/real-estate/construction-speeds-up-july-at-fastest-pace-in-12-years-commercial-work-jumps-20170806-gxqlog

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According to The Australian Financial Review, construction activity grew at its fastest pace in more than two years in February, as expanding house building and infrastructure work more than offset a continued decline in work on apartments.
An index measuring activity across the four sectors of houses, apartments, commercial and infrastructure construction jumped to 54.7 last month, a gain of 7.4 points from January and the highest reading since September 2014.
A rapid growth in current house building activity and future orders – a leading indicator – and a similar situation in engineering due to road and rail projects coming on stream underpinned the healthier picture.
A reading above 50 indicates expansion, while a reading below 50 shows contraction. The greater the divergence from 50, the faster the rate of expansion or contraction.
The index for house building activity jumped 10.7 points to 60.9, while new orders in the house building sector rose 13.7 points to 63, the highest level since September 2014, when it was 66.2.
 "There is still life left in Australia's new home building sectors," HIA chief economist Harley Dale said. "New home construction activity will hold up very well in the short term, after which there will be a marked decline in medium/high-density construction relative to detached housing."
The separate index for engineering construction activity grew 11.1 points to 53.9 points, while new orders in the sector also turned positive, rising 7.7 points from January to 51.1. It was the first expansion in new orders since September last year.
"This improvement reflects new contracts secured by businesses for construction work in areas outside of mining, including road and rail projects," the report said.
The figures back up a November report by the Australian Construction Industry Forum group, which said infrastructure spending would overtake residential construction within three years as a faster than expected pick-up lifts engineering work out of its post-mining-boom slump.

Ref:http://www.afr.com/real-estate/construction-grows-in-february-as-houses-engineering-offset-apartments-decline-20170306-gus49b
 
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According to The Australian Financial Review, iron ore keeps getting told the end is nigh: so far in 2017, the response has been the end's just another high. The rally has been powerful enough to push futures in China back to $US100 a tonne as spot prices trade at levels last seen in 2014, boosting miners' shares.
On China's Dalian Commodity Exchange, most-active futures surged as much as 8.3 per cent to 694 yuan ($US101) a tonne and settled at 688 yuan, while Singapore's SGX AsiaClear contract also climbed. Spot ore with 62 per cent content in Qingdao advanced 3.3 per cent to $US86.62 a tonne, the highest since September 2014, according to Metal Bulletin.
Iron ore rallied in 2016 as China added stimulus, supporting steel production and confounding bears who'd highlighted prospects for additional low-cost output and concerns that the top buyer wouldn't be able to absorb the supply. The same dynamic has been at play in recent weeks, with banks including Goldman Sachs flagging risks of weaker prices over the course of 2017 even though near-term support was seen as strong. Friday's gain came amid optimism about the immediate outlook for consumption.
"Construction demand is returning, with developers reportedly buying steel now even if they have not resumed construction on certain projects," Tomas Gutierrez, an analyst at consultancy Kallanish Commodities, said in an email. "The second half of the year is likely to contain surprises and lower prices, but for the moment traders and steelmakers plan to make the most of a relatively strong market in the coming weeks."
Miners' shares are benefiting from the rally. Rio Tinto Group, which this week reported its first profit gain since 2013, was 5.5 per cent higher in late Friday trade in London. Vale also was up more than 5 per cent on Friday, lifting its year to date advance to 32 per cent
Data from China on Friday pointed to robust local demand for iron ore, as well as steel, as imports of the raw material rose while overseas sales of steel fell. Iron imports gained 12 per cent to 92 million tonnes in January from a year ago, according to customs data. Sales of steel were at the lowest since 2014.
With stockpiles of iron ore at China's ports at a record and miners including Brazil's Vale bringing on new supply, Liberum Capital is among forecasters seeing lower prices, predicting a drop back below $US50 in the second half. Citigroup has said it sees a sharp correction, while top forecaster RBC Capital Markets described prices in January as unsustainable.
Not everyone is bearish. Prices may average $US73 this year, according to JPMorgan Chase & Co, which sees them at $US71 in the third quarter and $US66 in the final three months.

Ref: http://www.afr.com/business/mining/iron-ore/iron-futures-in-china-top-us100-mark-20170210-gualjs
 
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According to The Australian Financial Review, thermal coal is expected to retain much of the price gains made last year as it continues to be one of the best performing commodities, driven by Chinese policies to reduce coal output and thereby oversupply, analysts and traders said.
After half a decade of decline, the value of thermal coal prices have soared from a year ago. The Australian thermal coal price, the Asian benchmark, has grown by two thirds since last January to $US84 a tonne, driven by a sharp cut in Chinese coal mining and strong demand.
Prices are likely to continue to trade in a roughly $US70-80 a tonne range this year but are unlikely to hit over $US100 again like last October, analysts and traders say.
"Most of it depends on China. If the output cap is relaxed somewhat, then its imports could start to drop prices back around $US60 or $US70 do seem a bit more sustainable for the year than those way up at $US80 or $US90," said Trevor Sikorski, head of natural gas and carbon at consultancy Energy Aspects.
"I don't think we would see returns back to sub-$US60 unless China really just abolished mine output caps altogether, which I don't think they will do," he added.
A Reuters poll of analysts last December forecast an average Australian thermal coal price of $US70.6 a tonne in 2017, up from the previous forecast last September of a 2017 average of $US53.6 a tonne.
Analysts and mining executives expect the Chinese government to order mines to reduce output again soon, likely after Lunar New Year festivities.
China might take a softer approach initially than when it limited mines' working days last April to cut inefficient surplus, as prices spiked and it was forced to relax the policy to avert a winter energy crisis.
However, limits could start ramping up again when the peak heating demand wanes.
"Again, much depends on the Chinese. Their policy amendments will once again be a driver for prices across the globe," said Wayne Bryan, analyst at Alfa Energy.
"The intention to cut 500 million tonnes of coal capacity by 2020 is ambitious but achievable," he added.
China has already cut more than 315 million tonnes of coal production capacity, according to a Reuters review of provincial data, and has pledged to cut another 250 million this year alone.

Ref:http://www.afr.com/business/mining/coal/thermal-coal-expected-to-hold-gains-amid-china-output-cuts-20170127-gu0g2w
 
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According to The Australian Financial Review, in what could prove a headache for incoming premier Gladys Berejiklian, NSW's dominance as the nation's top economic performer is set to be challenged in 2017 by Victoria or the ACT, which are enjoying strong population and jobs growth.
But the big surprise in the Commonwealth Bank's latest State of the States report is Tasmania, which usually lags the mainland but has surged into fourth place on the back of a growing population.
Annual growth in home lending in Tasmania is now the strongest nationally at 10.3 per cent. Housing finance is a good indicator not only for construction but for activity in the financial sector generally.
NSW held onto the position of best-performing economy on a broad range of economic indicators, including economic growth, retail trade, dwelling starts and business investment.
But Victoria continues to record the strongest annual population growth and the ACT economy is underpinned by low unemployment. 
"NSW remains solidly on top of the economic performance rankings but it may experience a challenge from either Victoria or the ACT over the coming year," ComSec chief economist Craig James said. 
Queensland and the Northern Territory are middling jurisdictions. But while Queensland's economy looks to be on an upward trajectory, the NT is losing momentum, according to the report. 
"The [Queensland] economy is second-ranked on dwelling starts and population growth is lifting," it said. 
"The strong level of home building will support the job market as well as consumer and business spending. Queensland should also benefit from higher revenues from tourism and rural exports."  
The NT has dropped from fourth spot to sixth. "The job market is strong but population growth is weak, affecting consumer spending and housing demand," the report said. 

Ref: http://www.afr.com/news/economy/nsw-on-top-but-victoria-and-act-gaining-comsec-20170122-gtw9pn

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According to The Australian Financial Review, the spot market was the place to be for coal miners in 2016, but with prices for the bulk commodity sliding rapidly, 2017 looks set to favour those selling on traditional quarterly contracts.
Those selling Australian coal at prices agreed in quarterly contracts, like Glencore and Anglo American, were left behind when coking coal prices skyrocketed last year, with the spot price more than $US120 higher than the contract price at one stage in September.
But the roles have quickly reversed on a 35 per cent slide in coking coal spot prices over the past 40 days; those selling at contract prices will receive $US285 for each tonne until March 31, and are already enjoying a 30 per cent premium over coal sold on the spot market, which is fetching about $US201 per tonne.
The rapid slide in the spot price has followed China's decision to overturn many of the supply interruptions that caused the coal price to rally in 2016 .
If, as expected, contract prices are stronger than spot prices during 2017, it will be the fourth year in five that contract prices have averaged higher than the spot price.
Credit Suisse has forecast coking coal will average $US194 a tonne in fiscal 2017, then fall to $US145 in 2018 and $US125 in 2019.
Shaw and Partners analyst Peter O'Connor believes spot prices for coking coal will be around $US120 or $US100 a tonne by the December quarter of 2017.
The steep falls in the spot price will eventually drag contract prices lower, with Mr O'Connor suggesting the contract price for the three months to June 30, 2017, will be significantly lower than the present quarterly price of $US285 a tonne.

Ref: http://www.afr.com/business/mining/coking-coal-price-retreat-favours-contract-sellers-20170108-gto0xq
 
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According to The Australian Financial review, Zinc powered to its highest levels in more than 8-1/2 years on Friday on continued fund buying but analysts cautioned that prices were outrunning supply/demand fundamentals.
Lead also extended its rally, hitting the strongest in 3-3/4 years.
Zinc is the best performing metal on the London Metal Exchange this year, surging 77 per cent this year on fears that closures and suspensions of major mines will lead to shortages.
Benchmark LME zinc closed at $US2819 a tonne, a gain of 3.5 per cent and its highest since March 6, 2008. It marked up an 11 per cent rise for the week, the largest weekly increase since February 2010.
Caroline Bain, senior commodities economist at Capital Economics said "I'm afraid I do feel there's a huge element of speculation and at some point sentiment will turn and we could see quite a sharp correction."
Lead, often mined in the same deposits as zinc, also pushed higher, helped by a 16 per cent fall in weekly inventories monitored by ShFE, bringing the stocks decline in China to 62 per cent since late July.
LME lead jumped 6.7 per cent to finish at $US2391.50 a tonne, the strongest since February 2013 and the biggest one-day gain in five years.
Most other metals were weaker, hit by speculators locking in profits from recent rallies and producer selling, but copper edged into positive territory by the close.
LME copper ended 0.2 per cent firmer at $US5879 a tonne after Chinese trade data showed refined copper imports fell 45 per cent year-on-year in October.
"However, we do not think this is signalling weakness in underlying copper demand and expect a rebound in China's copper imports soon," Barclays said in a note.
Aluminium shed 0.8 per cent to close at $US1757, nickel slipped 0.1 per cent to $US11,570 and tin fell 2 per cent to $US20,925.

Ref: http://www.afr.com/business/mining/copper/zinc-lead-power-base-metals-higher-20161125-gsy217
 
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