Tempering Enthusiasm
In a bit of a topsy turvy week the market fell 116 points or 1.6%. Iron ore and gold keep falling, coking and thermal coal keep rising (coking coal at a 5-year record), and now thanks to a coup in Guinea, bauxite and alumina are rising with another 15% pop last night. Guinea is a major global bauxite supplier and accounts for around 55% of Chinese supply. This rise in the price of bauxite (the base ore used for aluminium extraction and refining) is good for Alumina (AWC) and South 32 (S32).
The market seems to be reconciling lower growth expectations at the moment, which in my view is entirely justifiable.