BHP has a new boss. Marius Kloppers is set to take over from Chip Goodyear later this year. Kloppers has been running BHP’s non-ferrous metals shop for the last few years, which includes star-studded sectors like base metals, stainless steel, and aluminium. He was also the driving force behind BHP’s clever acquisition of WMC and its nickel assets in 2005. Will the new chief at BHP want to make a splash early in his tenure with a big deal? We’ll see…
Did you see the fascinating article in yesterday’s Australian about Queensland Rail’s inability to keep up with coal demand at the port of Dalrymple Bay? Coal producers are hinting they’ll have to sack staff at the height of a coal export boom. Why? They are unable to export all they can produce because of the clogged rail lines. This idles miners and leaves ships off the coast empty for up to a month at a time, racking up huge demurrage charges for the producers. The big belly aching about the back log is coming from one of Queensland’s biggest customers, South Korea’s Pohang Steel (POSCO).
Wouldn’t it be something if Australia lost customers for its rich black coal at the height of a boom because it couldn’t deliver enough of the stuff? Granted, quite a few people underestimated the strength and growth of Chinese and Asian resource demand. But it just goes to show you that the good times don’t last forever. If you can’t produce the stuff in sufficient quantity, there are other producers out there to take your place. It would be a strange twist on the boom, a crimp in capacity and quality infrastructure driving customers away. But it could happen; in fact, it already is.
Meanwhile, MarketWatch reports that global deal volume hit an all-time record in May. “At least US$496 billion in deals have been announced for the month, with mergers in the United States alone totalling US$191 billion…These volumes put May on track to be the heaviest for global mergers ever recorded by the research firm, though US deal volume will likely fall short of the record for the month reached in May 1998.”
Jeez. We’ve hit a record globally, and US deal volume is still short of its own all-time high. Maybe that will change in the next few weeks.
The Daily Reckoning Australia