A three-year boom in prices for some of Australia’s most important commodities is fast losing steam, tempting investors to change horses mid-race.
Saul Eslake was tempting fate. As the keynote speaker for a sparsely attended mining conference during the deathly bottoms of the commodity cycle, the prominent economist’s message did not lift the mood.
”It could well be, in my view, that the commodities boom Australia has just experienced in the last 12 or so years is the last of its kind in human history unless unforeseen technological developments ordain otherwise,” he told Melbourne’s IMARC conference on November 10, 2015.
“In the case of iron ore and coal in particular I don’t think we have seen the bottom of prices yet, even though there may be some basis for being a bit more optimistic about the outlook for base metal prices.”
As if smited into action, the Australian mining industry roared back to life over the subsequent 45 months, buoyed by a commodity price rally that surprised more observers than just Eslake in its scale and its longevity.
In the period since Eslake’s bold call, prices for iron ore, thermal coal, zircon, coking coal and manganese have risen to five year, six year, six year, eight year and eight year highs respectively.
For the rest of this article: https://www.afr.com/companies/mining/changing-of-the-guard-as-mining-s-mini-boom-loses-steam-20190828-p52lr8