Market cracks have punters searching for China’s ‘Lehman moment’
Oh the irony.
“Risks are even greater in an opaque, developing nation like China. The black-box nature of China Inc. warps yield levels, credit spreads and the sober allotment of credit ratings. Along with censoring the media and Internet, Beijing discredits or blacklists overseas researchers highlighting risks.”
“If China’s investment instruments were more trusted, and ready for prime time, yields might be falling with the rest of the globe. They’re not.”
And Moody’s, Standard & Poor and Fitch didn’t see Lehman’s collapse coming? They gave Lehmans a triple A rating in the weeks prior to the collapse.
In China the State may distort things but institutions in the West ignore the things they find inconvenient.
“When the music stops, in terms of liquidity, things will be complicated, but as long as the music is playing, you’ve got to get up and dance.”
Chuck Prince, CEO, Citi Bank
This is the other side of the argument.
A lot of the points made are questionable/arguable but its interesting to see what the principal objections/misunderstandings from the other side of the debate are.
Metal Bulletin of London: Glencore’s Koniambo Nickel Plant Has a Problem
A leak caused the evacuation of the northern plant and the cessation of nickel production has become the main information site of the London metal market. An article written from its offices in the City and Shanghai.
Facade of the London Metal Exchange (LME). Financial District of the City of London. © Alain Jeannin
© ALAIN JEANNIN Facade of the London Metal Exchange (LME). Financial District of the City of London.
By Alain Jeannin
Posted on 25/06/2019 at 03:32, updated on 25/06/2019 at 04:26
The information quickly circulated. In mid-morning Monday in London, the main news site of the global metallurgical and mining industry, now linked to the agency Fastmarkets, announced the discontinuation of production at KNS in New Caledonia.
Glencore’s Koniambo nickel plant evacuated amid leak, ceases production
Koniambo Nickel SAS, 49% -owned by commodity firm Glencore, has been evacuated and has not been released yet.
Metal Bulletin (Fastmarkets) Amy Hinton London with Ellie Wang and Violet Li in Shanghai
What does the article say?
The publication was made Monday morning at 11.40 GMT, shortly before the opening of the London Metal Exchange (LME). "Koniambo Nickel SAS, 49% owned by commodity company Glencore, evacuated temporarily ceased production at its northern plant in New Caledonia after a leak at 6:22 am local time on Monday, June 24. " And to continue, "the leak, whose cause is currently unknown, lasted about an hour on the two production lines of the plant and constituted a mixture of molten materials from the plant, including nickel and silver. slag "[slag formed during melting or metal forming. ]
In London, we relativize …
"According to the Metal Bulletin, it is estimated that about 10 tonnes of molten material was lost (…) The shutdown could have a negative impact on nickel production volumes, since only one of the production lines The first production line, which was already under maintenance, remains closed. " Koniambo Nickel produced 5,000 tonnes of refined nickel in the first quarter of 2019, down 24% from the same period in 2018, according to the latest report by Glencore. “But the plant produced 28,300 tons of refined nickel in 2018, up 16% from the 17,500 tons of 2017,” said Amy Hinton, London journalist of the MB.
"For the London metal market, Koniambo Nickel currently accounts for only 1% of global production, which is too small to have an impact on LME metal prices, especially when we expect a sharp increase. from Indonesian production of ferronickel (NPI) "
David Wilson, nickel market expert at Freepoint Commodities
Glencore’s nickel production in 2018 was 123,800 tonnes, up 13% from 2017, mainly reflecting the Koniambo plant’s use of its two production lines during the year. " this progress could now be jeopardized by this last leak “advances the Metal Bulletin which is more circumspect than the management of the factory which qualified the incident as” anecdotal ".
Ferro-nickel from the Koniambo plant normally contains 55 to 57 percent nickel, according to Chinese nickel buyers for stainless steel. “China has imported 44,017 tonnes of ferronickel from New Caledonia in the first four months of this year, accounting for 8% of its total ferronickel imports, according to China’s customs statistics,” said MB reporters Violet Li and Ellie Wang. in Shanghai.
Apart from this incident at KNS, a source close to the London market evokes a “sensitive situation” for New Caledonia’s ferronickel exports, which fell by 27% in the first three months of 2019 compared to the same period in 2018. And incident at KNS is unlikely to improve the situation …
Nickel price on the London Metal Exchange (LME) Monday, June 24 at 18:30 GMT: 12,202 dollars per ton + 0.74% trend “purchase”.
EU, Japan and US to co-operate on hydrogen and fuel cells - Energy Live News
“…they believe the technologies could bring significant benefits to the energy sector, the economy and the environment.”
I think this has more to do with trying to protect the interests of the oil/petro-chemical industries than anything to do with protecting the environment.
“The step up in BMW’s electrification efforts comes as European carmakers face an unprecedented challenge to their profitable business model as major markets, from the UK to the rest of the EU to China, plan to decarbonise road transport.”
“For German carmakers including BMW, Volkswagen and Daimler, the race to move away from fossil fuels is particularly urgent. Under strict EU rules due in 2021, manufacturers must ensure average emissions from new cars are below 95g of carbon dioxide per kilometre driven or face huge fines. BMW’s models averaged carbon emissions of 128.9g per kilometre in 2018, according to the data company Jato Dynamics.”
“In response the BMW group plans to increase sales of electric or hybrid vehicles by more than 30% a year up to 2025, slashing average emissions across its three brands: BMW, Mini and Rolls-Royce.”
“China, US agree to resume trade talks in phone call ahead of G20”
What a fantastic quote:-
“Proving that corruption occurred in the mining sector is not that easy,…It’s like a fart — the smell disturbs people nearby but proving who farted requires strong evidence.”