The Day Ahead
The escalation in the US-Iran conflict is the dominant force today. With the Strait of Hormuz southern corridor collapsed and Iran threatening to close the Red Sea via Houthi allies, oil prices are set to spike further. This will feed directly into Australian inflation expectations and put the RBA’s next move under intense scrutiny — don’t be surprised if the market starts pricing in another rate hike. The ASX is already bracing for a weak open after Wall Street’s AI-led sell-off, and the combination of geopolitical risk and tech wobbles will test investor nerves ahead of August earnings.
Watch for developments on BHP’s Pilbara industrial action: high-voltage workers have voted 98% in favour of 24-hour stoppages. If this escalates, it could threaten iron ore shipments at a time when the company is already dealing with a record year and a $US900 million investment in Ministers North. Also keep an eye on POSCO’s call for coking coal pricing reform — this is a direct challenge to the current index system and could trigger broader industry debate. Finally, the ALP national conference kicks off today, with union pushes on bargaining fees and AI regulation likely to dominate headlines.
Currency Movements
| Pair | Price | 24hr Change | 7-Day Trend |
|---|---|---|---|
| AUD/USD | 0.6985 | +0.0000 (+0.00%) | |
| EUR/USD | 1.1445 | -0.0024 (-0.21%) | |
| GBP/USD | 1.3452 | -0.0027 (-0.20%) | |
| USD/JPY | 162.38 | +0.2690 (+0.17%) | |
| USD/CAD | 1.4020 | +0.0000 (+0.00%) | |
| USD/CHF | 0.8083 | +0.0017 (+0.21%) | |
| NZD/USD | 0.5845 | +0.0000 (+0.00%) |
Yesterday's Key Stories
Geopolitics & Commodities
- Iran has told Houthi rebels to close the Red Sea route if US strikes escalate, while the Strait of Hormuz southern corridor has collapsed after Iran targeted commercial tankers, forcing shipping to the central route and raising fears of further disruption to global energy supplies.
- The US confirmed two soldiers killed and one missing in Iranian attacks, and is now targeting Iranian infrastructure; Gulf nations are building alternative pipelines and ports to bypass Hormuz, but analysts are divided on long-term viability.
- POSCO, the largest buyer of Australian coking coal, called for a reform of the current index-based pricing system, arguing it is distorted by a small number of high-priced spot transactions; the article also notes broader pressure on iron ore pricing from China and a call for a parliamentary inquiry into Australia’s commodity pricing systems.
- Australian beef exports to China have halted due to a new 55% tariff, but China holds historically high stockpiles of frozen beef; analysts expect shipments to resume in September for next year’s inventory.
Iron Ore & Steel & Coal
- BHP approved a $US900 million ($1.3 billion) development of the Ministers North iron ore deposit in the Pilbara, a satellite extension of its Yandi mine, with first ore expected in FY29 and a ramp-up to 20 Mtpa; the investment helps maintain BHP’s medium-term target of 305 Mtpa across its iron ore business.
- BHP’s high-voltage workers in the Pilbara voted 98% in favour of authorising stoppages up to 24 hours, escalating industrial action after a historic strike at Port Hedland; unions seek transparent classifications and equal pay.
- The closure of Australia’s only manganese alloy smelter, Liberty Bell Bay in Tasmania, leaves the country reliant on imported alloys for steel production; remediation costs of about $200 million may fall to Tasmanian taxpayers.
- HVO coal mine’s future to 2045 is being examined by the NSW Independent Planning Commission, with the NSW Department of Planning finding environmental impacts manageable under government policy.
Critical Minerals & Energy
- Lynas Rare Earths CEO Amanda Lacaze leaves after 12 years, having transformed the company from near-collapse to a $16 billion market cap, the largest rare earths supplier outside China; she overcame Chinese market manipulation, Malaysian activism, and a Wesfarmers takeover bid.
- Federal Resources Minister Madeleine King expressed strong support for Alcoa’s Wagerup gallium project in WA, which will supply about 10% of the world’s gallium and establish a new supply chain outside China after Beijing restricted exports.
- Zen Energy collapsed into administration due to volatile power markets and a sharp decline in Large Generation Certificate prices, threatening several clean energy projects including the Limestone Coast North battery and Bulabul battery; the failure is one of the biggest in Australia’s energy transition and poses a contagion risk.
- Frontier Energy secured underwriting commitments for $280 million in debt from Natixis and Sumitomo Mitsui Banking Corporation to finance the Waroona green power project, a 120 MW solar farm and 80 MW battery in WA.
- The Capacity Investment Scheme is struggling: only 13 of 59 projects from early auctions have reached financial close, with industry experts estimating less than half will be built due to rising interest rates, lower wholesale prices, and supply chain constraints.
- South Korea aims to become a top-three AI superpower by leveraging its dominance in HBM chips from Samsung and SK Hynix, but faces risks including power supply constraints and competition from China; the country plans to invest hundreds of billions in a new chip-making hub.
Today's Useless Fact
A 2" X 4" is really 1-1/2" by 3-1/2".