Iron Ore

BHP Billiton has come out fighting and sweetened its 3 for 1 preliminary offer for Rio Tinto.

Friday’s surprise announcement by Chinalco and Alcoa is not the only arrow on the Chinese government’s bow, UK newspapers reported over the weekend.

Steel industry consultant MEPS notes more producers are considering introducing alloy surcharges and in its view this bodes well for stainless steel prices.

Both Wesfarmers and Macarthur Coal have declared force majeure as a result of flooding at their operations but brokers point out the reduced export volumes should support coal prices during contract negotiations.

Barclays Capital suggests rather than reducing exposure to commodities when volatility increases it should be retained as there is little link between equity market and commodity price returns.

Steel industry consultant MEPS anticipates continued strong global demand growth for steel in coming years, driven by Asia and emerging regions such as South America and the former USSR.

CommSec gives its view on a wide range of issues that will dominate the Australian landscape in 2008.

The rumour is US private equity firm Blackstone is now in the race for Rio Tinto.

Steel industry consultant MEPS has reviewed the outlook for steel production in coming years and sees China and the former USSR leading the way in lifting global output.

The latest forecast from ABARE suggests commodity earnings will grow by only 1% in FY08.