Analysts take a dim view on commodity prices

BlackRock's mid-year outlook yesterday said a solution to Europe's debt problem was "not likely" this year and economic activity in the US had "clearly stalled", The Australian reports.

While more constructive on China's growth bouncing back in the next six months, the global asset manager expects annual growth to trend down to 6-8%, instead of 8-10%, as China moves to a more sustainable growth path.

"It will mean that it's not the kind of frothy commodity environment we saw five years ago…but commodity markets can still stay at quite elevated levels," BlackRock Australia head of asset allocation David Hudson said.

"It's not a really bullish view on commodities or the resources sector but we're cautious on being too bearish on the sector as well.

"It's a little bit like a lot of things happening at the moment… it's kind of not a disaster, not fantastic, it's somewhere in the middle."

BlackRock's comments came after Merrill Lynch, JPMorgan, UBS, Nomura, Credit Suisse and Morgan Stanley in recent weeks took the knife to their price forecasts for a raft of commodities.

Henry’s tax plan also complex, say critics

Former treasury secretary Ken Henry had complained of the complexity of the minerals resource rent tax, yet his own proposed resources super profits tax was almost as complicated, critics said, according to the Australian Financial Review.

One of the key elements that drove complexity of the MRRT – the valuation of the resource at extraction point – was a part of the RSPT proposed in Henry’s review of the tax system in 2010.

“Ultimately the RSPT would have been complex as well,” said Perth-based Greenwoods & Freehills director Nick Heggart.

Henry told a forum on Monday that the MRRT was more complicated than the 40% tax on super profits that he proposed in the 2010 tax review.

“The obvious question I dare not ask is whether it is worth it…I dare not even think about that question,” he said.

Aside from valuation, the other force complicating the MRRT was its transitional relief, by way of a deduction for a company’s starting base of assets at May 2010.

That element was not a part of the earlier RSPT; but Heggart said its absence was the whole problem with that earlier tax.

Asciano knuckles down to automation

Asciano is holding a board meeting today amid speculation the ports and rail group is considering acquiring equipment that would allow it to eventually automate its Patrick wharf operations at Port Botany, according to the Australian Financial Review.

The board meeting is expected to cover a range of issues.

Asciano is also due to appoint a new chief financial officer after appointing Angus McKay to run its Pacific National Rail business to give him broader experience on the theory he could be a candidate to succeed chief executive John Mullen. Asciano declined to comment on any board discussions.

The company told investors and analysts in May that an increase in its footprint at Port Botany would allow it to invest in “new equipment and work practices” over the next few years.

Asciano recently bought nine new “ship to shore” cranes made in China, which are taller and faster than existing cranes, to help improve productivity.