Join our daily newsletter At The Bell to receive exclusive market insights
Welcome back to the working year – or not, if you’re lucky enough to have a holiday break period running beyond Monday, January 6.
We’ve seen Brent Crude tick up slightly to kick off the second week of the year; gold and bitcoin remain strong though down off the levels they saw late last year.
In retrospect, there was more of a Santa Rally for bitcoin than there was for Wall Street – though, those two worlds are now firmly interlinked.
The ASX missed a Santa Rally entirely – and in the IPO space, the biggest event on the radar for 2025 is still the expected ‘listing’ of Chemist Warehouse (which Sigma Healthcare will soon become on the bourse.)
(Canva is also expected to list in the U.S. this year, but we haven’t heard much about that in a while.)
But amidst the party season, Americentric politics coverage and relative doldrums for Australian equities, we’ve seen some headlines come out over the break that could be omens for 2025.
Here’s what I think we’ll be talking about throughout the year.
China’s new steel tech threatens Oz miners
To make what could be a boring story exciting, China has unveiled its new ‘vortex lance’ steelmaking technology which, if scaled up in the country, could end up tanking the share price of Rio Tinto (ASX:RIO), BHP (ASX:BHP) and Fortescue (ASX:FMG) – to name a few.
According to data originating from China (I hate to say it, but maybe keep a grain of salt nearby), the world’s second-largest economy has found a way to boost steelmaking productivity by 3,600 times.
In short, scientists have found a way to make steelmaking feedstock from iron ore in a ‘flash fry’ type of way that reportedly takes less than ten seconds. Extremely high temperatures are involved, as well as machinery capable of spraying 450 tonnes of iron ore particles per hour into a furnace.
We’re not talking small-scale laboratory experiments here if reports are taken at face value.
But it’s not just productivity that matters. The ultimate value proposition for China is China doesn’t need high-grade Australian ore using vortex lance manufacturing.
The process allows China to produce high-purity liquid iron from low-grade ore, a resource of which the country has plenty.
This could, ultimately, hit the AUD as well as miners’ share prices – our biggest export is iron ore and the AUD is seen as a thermometer for the Chinese economy.
This is, by and large, something of an existential threat to Australia’s economy. Maybe we could set up vortex lance factories of our own, though, energy prices would probably prohibit that.
(Note: A South China Morning Post article posits the research was published by a team led by Prof. Zhang Wenhai in the November issue of China-based journal Nonferrous Metals. Curiously, the paper proves hard to find.)
The US proposes alcohol cancer warnings
There’s some big caveats to this one I’m going to point out first and foremost.
- Trump is unlikely to approve perceived ‘red tape’ around alcohol sales.
- Any impact on Australian stocks would require Australia to do the same, which also seems unlikely.
- Stock price impacts would most likely impact Treasury Wine Estates (ASX:TWE) more than liquor-exposed retailers such as Woolworths (ASX:WOW) and Coles (ASX:COL).
- It is unlikely a cancer label would significantly dent demand for alcohol more than a tobacco-style price increase scheme.
For the purposes of this article, I’m just going to point out all of that from the outset.
Still, if we were to see the U.S. – under Donald Trump, no less – seriously consider cancer hazard labels on alcohol packaging, it would be a fairly monumental update to existing regulatory and compliance ecosystems.
The US Surgeon General has released its view the American consumer regulator should consider mandating cancer warnings on alcoholic drinks pointing to research that finds even small amounts daily increase the risk of fairly major cancers.
Then again, this isn’t anything new – Australia’s been running TV ads saying the same thing for years now.
Still, when America coughs the world gets a cold. But in this case, Trump could be pretty effective Sudafed.
Groundhog Day for uranium
Remember how uranium prices shot up in late 2023 on the back of Kazatomprom’s production issues? That saw the nuclear fuel feedstock commodity clock over US$100/lb, a record high outside of an anomalous period around 2007.
While the price has since moderated, we’ve kicked off 2025 in much the same way.
A project managed by a JV comprising Canada’s Cameco and Kazakh Kazatomprom has once again seen its own production hiccups become a catalyst for a uranium price jump on the NYMEX, though, far off 2024 levels.
As of Monday, uranium prices are up just over +6% week on week. Perhaps unsurprisingly, ASX stocks all saw a jump last week.
Boss Energy (ASX:BOE) and Silex (ASX:SLX) were still shooting green on Monday, but Peninsula Energy (ASX:PEN) was down -6.8% to $1.37/sh after announcing its new CEO.
BRICS-a-brac: other things to note
- Thailand has officially joined BRICS proper.
- India’s IPO market went off in 2024, relatively speaking, and solar energy companies (or renewables broadly) saw four new billionaires made. Can India save the ESG thematic through Trump 2.0?
- Foreign-made phone sales in China have tanked by almost half YoY according to China-borne data.
- Biden blocks US Steel takeover deal from Japan’s Nippon on widely debated ‘national security’ grounds.
Join the discussion: See what’s trending right now on Australia’s largest stock forum and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
