Australian Fires or Curb Rare Earth Ore Production

Australian fires may curb the output of coal, rare earth ore, bauxite, etc., as the chain reaction of its result. The momentum of the Australian forest fire has not weakened for several months, causing extensive damage to the local ecological environment, ecosystems, and wildlife. The industry is concerned that the adverse effects of the fire may be extended to the economic sector, triggering a chain reaction.

The Australian economy is under pressure. The Australian fire, which began in September 2019 lasted nearly four months, killed more than dozens of people. At least 24 million acres of Australia have burned in one of the country's worst fire seasons on record. That's an area larger than Portugal, and more than 12 times the area that burned in California in 2018, the state's most destructive year for wildfires.

the map showing the Australia fires image

"The Australian fires will not be conducive to Australia's economic growth in the fourth quarter of 2019 and the first quarter of 2020, and will especially dampen economic activities in the country's tourism, regional trade, construction and agricultural production." Eleanor Creagh told the Shanghai Times that she estimated the fire to cost the Australian economy billions of dollars.

The fire also dampened market confidence. ANZ-Roy Morgan's weekly consumer confidence survey report data shows that in the first week of 2020, Australian consumer confidence fell to 106.2, a decrease of 1.7% from the agency's previous survey data, the lowest in nearly 4 years. Between 2010 and 2019, the average increase in the first week of January was 3.4%.

At the same time, the prices of some of China's energy products may be affected. As one of Australia's closest trading partners, it is also of concern whether Chinese related industries will be affected in the fire. At present, the market believes that the impact area is focused on the energy field.

"China is Australia's main energy trading partner, including coal, natural gas, iron ore, bauxite, etc. Some listed companies invest directly or indirectly in Australia's raw ore. It is expected that after the fire, local mines are unlikely to be short-term expansion, and it may restrain the output of coal, rare earth ore and bauxite, leading the price of rare earth and bauxite likely to rise." Zhenming Ren, a market analyst at online financial services dealer CMC Markets, told Shanghai Securities News.

shocking satellite image reveals extent of Australian fires image

The Australian fires may restrain the production of coal, rare earth ore, bauxite and so on as the effect chain continues. Ecology science writer Hui Ren told Shanghai Securities News that record high temperatures, persistent drought and inadequate response on the part of Australia had caused the catastrophic fire. The fires in Australia are happening on such a scale that their effects are even being felt beyond its borders. Across the Tasman Sea in New Zealand. In Hui Ren's view, according to the current situation, if the weather conditions do not change, the fire may continue to spread.

 

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