Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Coronavirus:
    • China is emerging from COVID-19, but its customer countries are still dealing with peak infections and restrictions, so a recovery in demand is lagging a potential supply recovery.   Imports of raw materials are surging.  
  • Gold – Retains safe-haven status through the investment market is starting to look (nervously) toward relaxing coronavirus restrictions and restarting industry.   
  • Base metals:  
    • Right now base metals markets are still more focused on the collapse in global demand, both at the first-use fabricator and the end-use consumer stage.  However supply is being affected by travel and transport restrictions.  Development decisions are being deferred. 
    • We note that base metal inventory movements on Chinese exchanges are all reductions, while those of European and North American exchanges are additions. 
  • Oil markets have been roiled by recent abandonment of production agreements with OPEC+’s agreed reductions being still too small, while COVID-19 is still at large. 
  • Investors should identify and evaluate commodities, and companies, that they plan to invest in when global economies and sectors recover.  
    • This environment is remarkably volatile with many jumping to conclusions on thinly detailed data.  
    • Analysis needs to be rigorous, and the commodities and companies robust.  
    • Turning points may be executed quickly, so investors need to have intended investment targets already understood.  
    • Whenever you forecast something you will be precisely wrong.  What matters is:  by how much; in which direction; and how robust your forecast really is. 


*Copper  Zambia intends revoking Mopani mining licences due to Glencore’s rapid response to COVID-19. 

Cobalt  DRC to begin massive COVID-19 info campaign.  Zero infections in Co-Cu mining region to date.   

*Nickel  China’s port Ni ore stocks at low levels.  Philippine output constraints offset somewhat by demand.

*Zinc & Lead  Zn market wrestling with supply/demand balance.  Paroo Stn Pb mine restart has finance. 

Tin  COVID-19 demand shocks on all base metals.  Many Sn producers reduced or suspended output.     

*Aluminium  ATO escalated transfer pricing probes on RIO, and launched probe into Alcoa & AWC smelters.

*Gold  Safe-haven status, but sentiment and prospects of re-opening businesses may mute price upside.   

Platinum & Palladium  South African Pt mined have been idled for 3 weeks.

*Oil  Lower prices & wider Brent-WTI price gap.  Expect more USA shale-oil rig reductions. 

Coal  Chinese demand remained but Europeans deferred.  Japan traded steel raw materials into China.

*Iron Ore  Chinese raw materials demand remained afoot, but others’ streel mills reduced or closed capacity.  

Shipping  Iron ore supported Cape rates.  Panamax softened on seasonal agri-product demand. 


USA – Treasury Yields:  USA Yields are very low.  

Baker Hughes – Rig Counts:  Rig numbers falling fast as oil price plummets. 

*USA – New House Starts: mild positive growth rate, strongest in the South. 

*USA – Industrial Production & Capacity Utilisation:  IP slumped.  Capacity Util down.