Data-Driven Commodity Research, The Commodity Report

The Commodity Report

Data-Driven Commodity Research

A unique newsletter about commodities and macro analysis in a weekly format.

Commodities

<ul><li>The benchmark, CRB Commodity Index, ended the week 3,5% lower</li><li>Things won’t get better and the current dump of energy products on the futures marketplace is in my opinion only a short-term phenomenon, caused by an ultra hawkish FED that will lead the economy into a recession and that probably with a hard and not a soft landing.</li><li>Since the covid pandemic began and economies around the world started to go all in on renewable plans, not only production capacity was shut down but also refinery capacity</li></ul>

The benchmark, CRB Commodity Index, ended the week 3,5% lowerThings won’t get better and the current dump of energy products on the futures marketplace is in my opinion only a short-term phenomenon, caused by an ultra hawkish FED that will lead the economy into a recession and that probably with a hard and not a soft landing.Since the covid pandemic began and economies around the world started to go all in on renewable plans, not only production capacity was shut down but also refinery capacity

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul>
<li>
<p>Coal / In Depth: China’s never-ending coal price woes</p>
</li>
<li>
<p>Rains / Unending torrential rain leaves at least 24 dead across China. At least 24 people have died and six more are missing as torrential rain continues to batter parts of China, according to state media reports and official statements.</p>
</li>
<li>
<p>Inflows / Foreign capital roars back into China’s stock market</p>
</li>
</ul>



Coal / In Depth: China’s never-ending coal price woes


Rains / Unending torrential rain leaves at least 24 dead across China. At least 24 people have died and six more are missing as torrential rain continues to batter parts of China, according to state media reports and official statements.


Inflows / Foreign capital roars back into China’s stock market



CX Daily: China’s Never-Ending Coal Price Woes

<ul><li><p>In Depth: How Kazakhstan distances itself from Russia to pursue domestic reforms</p></li><li><p>Five things to know about China’s private pension system</p></li><li><p>Shanghai pledges stricter oversight of pandemic supplies after complaints of rotten food</p></li></ul>

In Depth: How Kazakhstan distances itself from Russia to pursue domestic reformsFive things to know about China’s private pension systemShanghai pledges stricter oversight of pandemic supplies after complaints of rotten food

CX Daily: How Kazakhstan Distances Itself From Russia to Pursue Domestic Reforms

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Macroeconomics

<ul>
<li>Our text-mined inflation indicators have seen greater volatility over the summer months, with media reporting of supply constraints emerging as our best-correlated indicator for 5yr5yr inflation expectations in recent months</li>
<li>Reporting on supply constraints surged to a new cycle-high +5.2x STDEVs earlier this month, and remains elevated at +3.8x; among a basket of commodities, China (ZCE) coal futures have been the most strongly correlated with our supply constraints indicator at 58% in the T6M, followed by Newcastle coal futures, significantly ahead of other commodity correlations</li>
<li>The sharp rally in ZCE Coal to a new 52-wk high this week (+45% YTD), driven by persistent coal shortages in China, has had far-reaching implications for global cost curves across a wide range of commodities from aluminum to plastics and fertilizers; shortages have also led to electricity rationing in multiple provinces, limiting production and lifting prices on key commodities and manufactured goods</li>
<li>Record low Chinese coal inventories are raising fears of another severe coal supply crunch in the winter, suggesting tight coal supply may continue driving inflation in the coming months</li>
<li>While the China coal shortage is hardly the only source of supply constraints currently driving global inflationary pressures, we believe the correlations are not spurious; a near-record US trade gap, record Chinese exports and spiking China PPI all point to accelerating inflation transmission from China to the US consumer, with the coal crunch a key driver</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes text mining/NLP to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


Our text-mined inflation indicators have seen greater volatility over the summer months, with media reporting of supply constraints emerging as our best-correlated indicator for 5yr5yr inflation expectations in recent months
Reporting on supply constraints surged to a new cycle-high +5.2x STDEVs earlier this month, and remains elevated at +3.8x; among a basket of commodities, China (ZCE) coal futures have been the most strongly correlated with our supply constraints indicator at 58% in the T6M, followed by Newcastle coal futures, significantly ahead of other commodity correlations
The sharp rally in ZCE Coal to a new 52-wk high this week (+45% YTD), driven by persistent coal shortages in China, has had far-reaching implications for global cost curves across a wide range of commodities from aluminum to plastics and fertilizers; shortages have also led to electricity rationing in multiple provinces, limiting production and lifting prices on key commodities and manufactured goods
Record low Chinese coal inventories are raising fears of another severe coal supply crunch in the winter, suggesting tight coal supply may continue driving inflation in the coming months
While the China coal shortage is hardly the only source of supply constraints currently driving global inflationary pressures, we believe the correlations are not spurious; a near-record US trade gap, record Chinese exports and spiking China PPI all point to accelerating inflation transmission from China to the US consumer, with the coal crunch a key driver
TMI Data Science utilizes text mining/NLP to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot: Supply Constraints & Chinese Coal Correlations Stand Out as Inflationary Drivers

<ul>
<li>On June 26, an official with the China National Development and Reform Commission (NDRC) suggested the coal price rally has run its course and is likely to see downward pressure in July on improved mine supply, higher imports and higher hydro &amp; solar power generation</li>
<li>This followed June 17 NDRC comments that the power crunch has started to ease with the arrival of the rainy season, after extreme tightness in coal availability required power rationing across multiple provinces in May-June for the second time in 6 months</li>
<li>Our text mining suggests reporting on coal shortages and power outages in key provinces peaked in the second week of June and has pulled back since, leading coal equities</li>
<li>With the cryptocurrency mining crackdown freeing up 21% of power supply in Xinjiang, 5% in Sichuan, 4% in Yunnan and 3% in Inner Mongolia, it appears the NDRC's near-term coal guidance may be credible</li>
<li>Ahead of Friday's June Non-Farm Payrolls release, we see outright declines in US reporting on labor shortages, signs of sequential improvement in temp employment, and renewed momentum in job postings</li>
<li>In Europe, we see continued elevated sentiment on the labor market, but reports of labor shortages are starting to surface; this week, the German IAB Labor Barometer, based on a survey of staffing agencies, hit its highest level since 2008 inception</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


On June 26, an official with the China National Development and Reform Commission (NDRC) suggested the coal price rally has run its course and is likely to see downward pressure in July on improved mine supply, higher imports and higher hydro &amp; solar power generation
This followed June 17 NDRC comments that the power crunch has started to ease with the arrival of the rainy season, after extreme tightness in coal availability required power rationing across multiple provinces in May-June for the second time in 6 months
Our text mining suggests reporting on coal shortages and power outages in key provinces peaked in the second week of June and has pulled back since, leading coal equities
With the cryptocurrency mining crackdown freeing up 21% of power supply in Xinjiang, 5% in Sichuan, 4% in Yunnan and 3% in Inner Mongolia, it appears the NDRC's near-term coal guidance may be credible
Ahead of Friday's June Non-Farm Payrolls release, we see outright declines in US reporting on labor shortages, signs of sequential improvement in temp employment, and renewed momentum in job postings
In Europe, we see continued elevated sentiment on the labor market, but reports of labor shortages are starting to surface; this week, the German IAB Labor Barometer, based on a survey of staffing agencies, hit its highest level since 2008 inception
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary tools text-mine the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshots:  NDRC Coal "Guidance", NFP Preview, European Labor Strength

Australia

Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure. Coal is composed primarily of carbon along with variable quantities of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen. A fossil fuel, coal forms when dead plant matter is converted into peat, which in turn is converted into lignite, then sub-bituminous coal, after that bituminous coal, and lastly anthracite. This involves biological and geological processes that take place over a long period.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Coal (COAL COMDTY)

The Commodity Report #60

The benchmark, CRB Commodity Index, ended the week 3,5% lower. Things won’t get better and the current dump of energy products on the futures...

The Commodity Report

CX Daily: China’s Never-Ending Coal Price Woes

Coal / In Depth: China’s never-ending coal price woes. Rains / Unending torrential rain leaves at least 24 dead across China

Caixin Global

CX Daily: How Kazakhstan Distances Itself From Russia to Pursue Domestic Reforms

In Depth: How Kazakhstan distances itself from Russia to pursue domestic reforms. Five things to know about China’s private pension system

Caixin Global

TMI Snapshot: Supply Constraints & Chinese Coal Correlations Stand Out as Inflationary Drivers

Supply constraints appear to be a key driver of inflation expectations recently; we find that Chinese coal prices are strongly correlated with our...

Elan Gore

TMI Snapshots: NDRC Coal "Guidance", NFP Preview, European Labor Strength

Our text mining saw media reports of power rationing and coal shortages in China peak in the second week of June in-line with coal equities; the...

Elan Gore

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)