Roy Hill is still in care and maintenance, Rio may have some interesting news soon and many other projects are in a hurry up and wait holding pattern
I see Clive had a win today in the papers
What's rio new news ?
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Roy Hill is still in care and maintenance, Rio may have some interesting news soon and many other projects are in a hurry up and wait holding pattern
I see Clive had a win today in the papers
I did mention some of this sort of thing before:
http://finance.ninemsn.com.au/newsbusiness/aap/8660268/worleyparsons-cuts-profit-guidance
Not to mention the vast majority of mining contractors right now. UGL, Boart Longyear, the SKMs and GHDs, etc etc etc. It has been in the news a bit.
Of course this is just because new projects have been canned or pushed to the right several years. Examples include:
OPR - Mitsubishi
Crosslands Jack Hills - Mitsubishi
Extension Hill
Southdown - Sojitz
Outer Harbour and associated mining expansions by BHPBIO - Dreampie
API West Pilbara - Baosteel
Anketell Port - CITIC?
Rio further expansion projects - Dreampie?
North Star - unimportant all along
Browse - Dreampie again
And that's just off the top of my head sitting here in front of the keyboard.
Of course this is offset by the very large investments already locked in (Gorgon, Wheatstone, Citic Pacific, Rio projects, etc) which will tide us over for awhile yet. But what was a pipeline of new investment that looked like bursting under the pressure now looks like a trickle...
NORMALISING RATES COULD START IN NEXT 12 MONTHS
While it is convenient for everyone long banks, equities, housing and fixed-rate bonds to argue that rates will remain around century lows for as long anyone can see, the truth is the process of normalising them will probably start in the next 12 months.
The concern, of course, is that investors are not stupid – and will “front-run”, or anticipate, government decision-making. The US dollar is already doing this. Interest rates on three-year Australian government bonds are back up around the RBA’s cash rate, and could easily soar 100 to 150 basis points higher. And as investors and sovereigns start racing for the exits to dump assets that fare badly when rates climb, markets could become disorderly.
The good news is that Australia’s economy is now benefiting from extraordinary, and unexpected, policy stimulus. You can get variable and fixed-rate home loans from banks with a “4-handle” in front of them. The slump in our currency is profoundly powerful for exporters as it helps to protect them from commodity price declines. It also makes importing competing industries, like tourism, more attractive.
The one major cost is that core inflation is almost certain to increase. Blind Freddy figured out that it was deflation in the value of internationally-priced consumer items, driven by our currency’s ascent, that was the principal reason Australia’s inflation rate has remained low, at around 2 to 2.5 per cent in recent years. This dynamic will now work in reverse.
Interested in your thoughts Rolf, on this from Chris Joye
Particularly his closing:
How do you see rates in the mid term, as you have been pretty spot on for quite awhile now, along with Bill Evans from Westpac..?
The interest rate drop has certainly helped with regards to the Aus$, I see it is now at 95, not seen it this low for a while.
how will it help you out of interest?
for me, pain from a falling dollar is offset by lower interest costs. Most people don't carry my debt load tho, so there is no offset for the blowout in their living costs.
a quote below talks about Blind Freddy.... I don't think it is at all obvious int he public arena:
"Blind Freddy figured out that it was deflation in the value of internationally-priced consumer items, driven by our currency’s ascent, that was the principal reason Australia’s inflation rate has remained low, at around 2 to 2.5 per cent in recent years. This dynamic will now work in reverse. "
Why are certain property markets rising, my guess is it is cheaper to buy than rent, anything else??
Renters are in a world of pain.