The escalating trade conflict between USA and China has unnerved base metal markets this week on the uncertainty of outcomes.  We note potential and outcomes in this issue according to the perceived strategic motives and goals of the major participants.

However most economic parameters we can see to date (see this and recent Commodity Reviews) remain sound, and we expect fundamentals will ultimately win out over sentiment.  20180706

*Copper  Still 12x labour contracts to be negotiated in 2018, many in Chile.

*Cobalt  India is actively seeking to source battery minerals Li, Co et al. COB & CLQ comments.

Nickel  CLQ comment. **Escalating trade conflict between USA & China. What are the likely outcomes.

Zinc & Lead  China’s Zn & Pb goals complicated due to co-production of Zn & Pb. MYL, NCZ comment.

Tin Interest in Cornish tin revived, in part due to associated Li brines.

Aluminium  China has issues with shutdown declarations and practise.

Gold  EXU outlining shallow mineralisation near Tampia.

Platinum & Palladium  US-European trade issues are impacting auto imports into USA.

*Oil  Russia has boosted crude production rates.

*Coal  JFY2018-19 thermal contract settlement is unsettled (Glencore/Tohoku) though others may deal.

Iron Ore  Capesize demand is up on iron ore, while Panamax is reduced..

Shipping  Capesize demand up for iron ore, though Panamax down this week.


Pinch Point updates:  Ni is tightening. Pb, Al & Zn, then Cu, are fundamentally tighter

*USA – PMI:  US economic outlook is strong.

*China- Industrial & Energy Output:  +ve growth in electricity and other select segments.

*USA – Construction Spending:  positive growth Residential, Non-Res, Public, Private

*Japan – Orders to Machinery:  robust growth.