Comments of particular interest are noted with ‘*’.
Matau’s Comments:

  • Chinese logistics remain challenging. [Aluminium and steel] mills are looking at trying to export more material now that domestic demand for finished aluminium products is depressed, a Chinese steel trader said. One problem is with logistics’ issues, with quarantine rules restricting the free movement of truck drivers in key areas such as Shanghai. “The transportation restrictions have affected our logistics for material delivery, which almost tripled our delivery cost compared with before China’s Lunar New Year,” an aluminium sheet producer in northern China said on February 12. Road issues mean that only state-owned steel mills with their own rail capabilities are able to easily receive raw materials or move finished products to the ports, the second steel trader said. Once material has arrived at the port, operations remain slower than usual due to reduced numbers of employees, temperature checks on workers and cargo bottlenecks, one shipping company said on Tuesday, adding that operations are smoother than last week. The good news for exporters is that once material is loaded to a vessel, the recent dive in global freight rates means sea transport has become more affordable.
  • Key discussion points are the uncertainty of the duration of the coronavirus outbreak, in China and in the rest of the world, and its intensity, and just what level of economic impact it will have. SARS was about 4 months long and affected China’s passenger traffic far more than freight. Travel restrictions now being imposed to limit coronavirus spread could potentially impact fright traffic, and therefore trade, more. 
  • Base metal markets generally remain fundamentally tight, notably Cu, Zn, Pb, and are incrementally continuing to tighten. Watch for supply disruption(s), and disruptions to demand. Chinese ‘travel restrictions’ brought about by the coronavirus epidemic, are likely to disrupt ability to supply and or receive goods.
  • Shipping data (Singapore data) for January appears strong, though the Baltic (February) indices reflect a much more downbeat picture.

*Copper  BHP is now the world’s largest Cu producer. However more capital is being spent on expansion by others.
*Cobalt  Glencore’s DRC production (Cu-Co), and stockpile management, are key.
*Nickel  Much hinges on Indonesian nickel-pig-iron production this year. (… independent of coronavirus).
Zinc & Lead  Chinese smelters cut output as coronavirus restrictions limit logistics. Surplus sulphuric acid.
Tin  Inventory inflows into warehouses in Malaysia and Singapore had only little impact on price.
Aluminium  Coronavirus restrictions impact logistics and smelter & factory restarts.
*Gold  Interesting! … Supply is at record levels … so is price. Price appears to be the driver for supply.
Platinum & Palladium  India has become the fastest growing platinum jewellery market globally.
*Oil Sanctions! A (USD 50m) cargo of Venezuelan oil has returned to Venezuela after about a year.
Coal Glencore & Tohuku starting negotiations for the JFY thermal contracts. China’s mines back on line.
Iron Ore  Prices rallied after Vale down-scaled its near term production outlook.
*Shipping  Demand for bulk shipping remains soft though may be bottoming. February Baltic data looks really soft.
*Iron ore, thermal coal, bond yields & the AUDUSD rate: Looks like yields are the driver now.
*Singapore Shipping: January data booming! … does not reflect the downbeat Feb (virus) Baltic indicators.
Baker Hughes Rig Count: Oil price down and USA rig count remains most sensitive to oil price.