Yes, we all live in a yellow submarine now…in the deep calm of the metaversian cosmos. But where did it come from?
Commodities are a vital part of the Aussie economy. And commodity stocks are heavily represented in the Aussie market, especially at the speculative end. The Rum Rebellion provides the latest news and updates on commodities so you have the information you need when Investing in Commodities.
Australia’s commodity exports are closely tied to China’s economy…
The Rum Rebellion looks at commodities for investment, money making opportunities, and to also show you what commodity prices are saying about global economic growth and the health of the Chinese economy.
When China slows, commodities take a hit. That has an impact on Australia, and flows through to the stock market and interest rate considerations. So we analyse commodities from a ‘holistic’ perspective, as well as highlight the individual investment opportunities when they arise.
At The Rum Rebellion, we are primarily interested in energy commodities and industrial commodities.
What are Australian industrial commodities used for?
With Australia’s most important commodity export being iron ore — this falls into industrial category.
Iron ore is used for making steel — which, to this day, remains the lifeblood of modern economies and a key barometer for their health.
Along with iron ore, Australia also exports significant amounts of aluminum, lithium, copper and nickel.
Aluminum has a huge range of uses which range from the transportation industry to packaging and building materials — so essentially an infrastructure commodity.
Copper is increasingly viewed as a tech metal — with electric vehicles (EVs) using significantly more copper than traditional automobiles.
Finally, nickel could be one of the critical metals for the coming li-ion battery boom as new types of batteries demand more of it.
Australian energy commodities and their destinations
Turning to energy commodities, these include oil, LNG, coal and even uranium.
ASX-listed oil stocks, like our largest oil company Woodside Petroleum Ltd [ASX:WPL], are frequently impacted by events in the Middle East, in particular OPEC production decisions.
Australian LNG producers like Santos Ltd [ASX:STO] may have a bright future ahead of them, as demand in the APAC region ramps up.
Coal remains a significant part of the Aussie economy, and despite the constant effort (in some political circles) to torpedo the Aussie coal industry — it plays a large role in our ability to maintain a trade surplus.
There’s two broad categories of coal — thermal coal and metallurgical coal.
Thermal coal is used to produce energy, while metallurgical coal is used in the production of steel and other metals.
Japan remains the largest importer of Australian thermal coal. China and India are the two main destinations for metallurgical coal.
Uranium is an outlier amongst this set of commodities as it is the most speculative.
But with China building up to 54 new reactors (11 being constructed and a further 43 planned) as we speak, a new uranium bull market could emerge.
Furthermore, the world invested $1.85 trillion in energy in 2018, so there is plenty of opportunity to be found in this sector.
We look for trends in global energy consumption to understand which companies are best suited to benefit from the massive amount of money that is spent on energy worldwide.
By reading this section of The Rum Rebellion, you can keep abreast of macro shifts in the world of commodities and the companies behind these moves. Stay up to date with the latest news on the commodities market in Australia…
While the name ‘Rum Rebellion’ is generally well known to most semi-students of Australian history, the involvement of rum was only a peripheral issue.
US crude finished April 20, 2020, at minus-$37 a barrel, blowing past the zero mark that few imagined would ever be crossed.
At first glance, it doesn’t sound too remarkable. But that’s until you hear that the citations are in fact for illegally storing shipping containers.
After hitting all-time highs (again) in recent days, US stocks took a breather overnight.The Dow fell 0.75%, the S&P 500 declined 0.51%, while the gravity-defying NASDAQ managed to remain flat.
Woodside Petroleum Ltd [ASX:WPL] released its September quarter results. Woodside Petroleum Ltd [ASX:WPL] share price is currently exchanging hands for $24.19 a share, a dip of 1.35%.
Rio Tinto Ltd [ASX:RIO] share price were slightly down 1%. The Rio Tinto Ltd [ASX:RIO] updated the investors on a ‘difficult’ third quarter, downgrading its full-year production guidance.
The deal sparked buying activity in both stocks, with Ampol [ASX:ALD] share price currently trading at $30.22 per share, up 3.60%. ZEL shares, in turn, are currently up 6%, exchanging hands for $3.42 a share.
It takes billions in exploration budgets and then capital investment to bring those resources to the market. It doesn’t just happen. And when it doesn’t happen, the lights go out.