Japan & USA

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Japan’s Industrial production is hitting lows not seen for a long time.  LNG pricing is also wallowing though appears to be bottoming.
  • USA’s PMIs for June data staged a remarkable jump.  Matau is sceptical that the PMI outlook presented can be sustained in the face of the current USA Covid-19 status.  Construction spending has reduced to minimal growth.  The USA industrial data does not look very healthy, and has not for some time.  Several facets have been reporting negative yr-on-yr growth since September 2019.  (e.g. see last week’s Commodity Review)
  • China’s steel production growth has boosted iron ore prices and demand for bulk carriers.
  • Base metals:  South America remains a focus, with Covid-19 risks to base metals supply.  Exchange inventories in Shanghai are mostly reducing.  Other exchanges mostly show gains.  Weekly data is creeping back toward the tight end of the pinchpoint graphs and prices are beginning to rise.  The northern hemisphere industry (including southern Chinese steel) usually slows down in July-August, which we expect to happen, likely exacerbated by Covid (though not as much in China as elsewhere).
  • Gold prices did not really go anywhere this week, except in other currencies.  Numerous risks remain available to trigger price responses including geopolitical unrest, and market fears of second+ waves of Covid-19 virus.  


Copper  Cu price has recovered well, though China’s seasonal summer slowdown may test current levels.

Cobalt  Tesla is being pressured to disclose its evaluating potential human rights issues in sourcing its Co.  

Nickel  BSX progressing evaluation of its Ta Khoa Ni-Cu-PGE project in Vietnam, with good intercepts.

Zinc & Lead  Forecasts are for Zn price to edge higher near term, though soften slightly mid-term.  

Tin  Covid-19 has driven demand shocks and supply shocks to most commodities.     

Aluminium  China’s domestic alumina output is softening while demand is increasing. .

Gold  Transport disruptions that have affected gold settlements are also impacting Pt & Ag settlements. 

Platinum & Palladium  Mar20Qtr sales of Pt bullion soared.  Industry lower prices will stimulate increased volume sales.

Oil  Oil prices up on the week but have renewed caution re-Covid-19 infections in USA.  

Coal  Coking coal demand firm on rising (global) steel output.  Chinese import restrictions still an issue. 

Iron Ore  2020 has been subject to major supply disruptions for iron ore. 

Shipping  Panamax rates becoming more efficient than Capes in the current strong demand environment. 


Japan – LNG prices:  appear to be bottoming, following Brent crude price moves.  

Japan – Industrial Production:  broadly heavy falls in May.

USA – PMI:  surprising jump in expectations in June data.  Can it withstand Covid?

USA – Construction Spending:  minimal growth in May data.