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May 7 2021

 

1. Housing BOOM…
Housing approvals running well above 2020 levels AND above 2008-20 average…

 
 
 
 
 
 

 

 

 

Source: ABS

 

2. Commodities BOOM…

Iron ore (62%) hits US$200/t. Last high point was ~$190/t in 2011…

Should you just buy iron ore names…? Maybe not. China is seriously cracking down on domestic steel mills to reduce pollution – often shutting dirty mills down. The result is a higher demand for high grade ore (think Vale, Rio, BHP) but not for lower grade (think Fortescue). Overall, reducing steel supply coming from China is a good thing for alternative steel producers such as Bluescope and Sims – reflected in record high steel spreads in places such as the US.

Source: NYMEX

 

3. Chicken BOOM…

A chicken shortage in the US has sent prices soaring! And major restaurants can’t keep up! Some independent restaurants claim to have gone weeks without chicken wings! Chicken breast prices have more than doubled since the beginning of the year, and wing prices have hit records, according to market-research firm Urner Barry (see chart below).

In Australia, we aren’t short a chook – but trying to find a truck driver in WA or a construction worker on the East Coast is almost as rare as locating Big Bird in the US…