Comments of particular interest are noted with ‘*’.
When hearing or reading of forecasts of supply or deficits, always consider which side of the story the writer is from (supply or demand), or is the author an impartial analyst or group. It often helps frame the comments.
- The price of copper and other base metals slipped on Wednesday after USA President Donald Trump threatened more tariffs on China, disappointing investors keen for a trade deal. While Trump said in a speech that a phase one trade deal was close, the market focused on his comments about raising tariffs on Chinese goods “very substantially” if a deal fails to be agreed. “It raised the level of uncertainty again, coming at a time when the market’s been in risk-on, happy-days mode for the past month,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
- Three weeks ago now, Chinese officials said it is doubtful about the resilience of any trade deal that may be signed with the USA under the Trump Administration. So far they are spot on! USA-China trade agreement – described by one commentator as ‘like parking on opposite sides of a street on alternate days’. Matau has doubts removal of all the tariffs placed in the recent year will be removed before the 2020 elections, and even then …
- Gold – “Demand in Hong Kong is steady as spot prices fell, but that is being offset by the protests as people are not shopping, not only jewellery but anything for that matter,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
- Indonesia – Significant numbers of miners agree to only sell Ni ores domestically (from January.
- Base metal inventories continue to remain tight. In a broad sense not much has changed. However low base metal inventories are getting more attention in the media than previously, and price responses in some commodities beginning to be seen through sentiment.
- IMO 2020 low sulphur regulations have already started to impact bunker fuels.
*Copper Supply set for a crunch with gap of 8 Mtpa by 2030, according to MEP.
*Cobalt Outlook to secure offtake of ‘traceable’ Co-hydroxide hard unless dealing with Glencore customers.
*Nickel Many Indonesian miners now committed to only sell ores domestically (to processors).
Zinc & Lead Zn still in backwardation – conflicting pressures of supply & demand, plus ‘hidden’ inventories.
*Tin Bolivia (with its traditional political risks) plans to morph from tin to lithium for its major value export.
Aluminium Some capacity is migrating within China from coal-fired to hydro-electricity power source.
Gold Gold price in India returns to higher levels than pre-gold import duty (5 July 2019).
Platinum & Palladium Signatures now on a new three-year miners’ wage agreement.
Oil Venezuela Is using invisible oil tankers to skirt USA (political) sanctions.
Coal China’s new policies in key production regions appear focussed on economy rather than pollution.
*Iron Ore Vale – the first miner to use a Chinese mainland iron ore futures price on a spot physical contract.
*Shipping Freight rates on Asian routes fell last week, influenced by the looming *IM 2020 deadline.
*Port Hedland Iron ore shipments: Strong growth in October, flat over 12 mo.
*Port of Singapore – shipping traffic: broadly +ve growth. nb: low-sulphur bunker fuel changes
*Japan – LNG prices: LNG and oil prices have been trading in relatively narrow bands since June.