The Role of Critical Minerals in Clean Energy Transitions (IEA March 2021)
Today, the global energy system is in the midst of a major transition to clean energy. The efforts of an ever-expanding number of countries and companies to reduce their greenhouse gas emissions to net zero call for the massive deployment of a wide range of clean...
Force Majeure
‘Force majeure’ has been recently raised as a consequence of disruptions to trade resulting from travel and other restrictions declared, attempting to constrain the spread of Coronavirus, and is likely to be invoked more in coming months: A number of important...
Some markets are capitulating … too much uncertainty to make decisions.
Contango is when forward prices (3mo fwd) are higher than cash (spot) prices, i.e. the market is more confident of supply now than into the future. Backwardation is the reverse, when cash prices > fwd prices, i.e. markets are more worried about (prepared to pay...
EV revolution could stall due to mineral shortages
Matau believes that current time constraints for the discovery, evaluation, permitting, construction, commissioning and delivery of new mine supply of critical commodities for batteries, currently of the order of 6-10 years, will constrain supply growth of EVs to below 10% p.a. (compared to forecasts of +20% p.a. for the next 10 years). This article from Petroleum Economist highlights this issue with regard to just the UK!
What Is GDP in China?
Below is a recent article by Michael Pettis (economics professor) of Peking University Beijing. His articles are usually insightful. Matau Advisory has recently been asked what GDP is actually made up of. The article below, by Michael Pettis, succinctly describes...
China Couldn’t Dominate Asia if It Wanted to.
We have seen a number of Asian countries stand up to major powers, and state, at various levels, that ‘this is our country, and we will do these things our way’. In order to successfully engage with these countries we need to recognise them and their identity, relationships and aspirations, something that at least one of the major powers is not doing today.
It is an interesting read, with insights we will do well to reflect upon, and to keep our eyes and minds open.
Caixin Survey: China’s Manufacturing Shrinks at Steepest Pace in Nearly Three Years
This item from the Caixin site provides insights into what each of the different China PMI and other indices report on. Broadly the Chinese indices are reporting on slower growth (approximately two -three year lows, which may be stabilising, as the economy grows at...
Commentary: China’s trade data weak? Not if you look at commodities
Anybody reading the commentary on China’s December trade figures would be left with the impression of an economy increasingly losing momentum amid a dispute with the United States. The trade data was grist to the mill for those taking the view that China’s economy is struggling, that the United States is “winning” the trade dispute, and that Beijing will be forced to compromise on Trump’s terms.
This may well turn out to be the case, but there are also trade numbers that paint an entirely different view of the Chinese economy, namely the volume of commodity imports.
USA – historical view of Yield & Interest Rate Curves
The history of almost three decades of USA yield and interest rates, as shown above, highlight a risk that when interest rates invert, particularly when 3mo yields/rates exceed 10 yr yields, a downturn often follows. While several in the markets have expressed...
Codelco Almost Sold Out of Cu supply on Strong China Demand
Top Copper Miner Almost Sold Out on Strong China Demand - Chinese copper demand has been so strong in the past few months that top producer Codelco has almost sold out of supplies for next year, well ahead of schedule, according to the chairman of the Chilean...