by Marg | Oct 7, 2019 | Commodity Review, Now Available
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- OPEC+ participants are girding their loins for potentially more production cut commitments.
- The USA – China tariff talks & trade wars continue to stunt trade oriented decisions. Some unexpected consequences (see tin).
- Base metal inventories continue to remain tight. In a broad sense not much has changed. Base metal prices are struggling to cope with the negative fears driven largely by the USA-China trade tensions. Low base metal inventories are getting more attention in the media than previously.
SUMMARY
*Copper Trade wars continue to deter activity. Outlook for future supply remains tight.
Cobalt Co inventory from the previously failed Fanya Metal Exchange to be auctioned on Oct 5th.
*Nickel Ni prices responding to low refined Ni stocks and looming ban on ore exports.
*Zinc & Lead Northern Canadian infrastructure proposed to deliver remote new mine production. IBG Citronen.
*Tin A bad vegetable harvest stings tariff affected USA steel makers.
Aluminium Vietnam imposes anti-dumping tariffs on Chinee products.
*Gold “Global policy uncertainty is at an all-time high”.
Platinum & Palladium Pd prices have run to record highs, on demand growth and supply deficit.
*Oil Nigeria prepared to make cuts to meet its OPEC+ commitments.
Coal Chinese buying of low price met coal imports continues.
*Iron Ore India to auction mining leases. May disrupt local supply and require imports to balance demand.
Shipping Cape & Panamax rates reduced this week, on easier grain & iron ore demand.
General
*Port of Singapore Shipping Traffic: Bulk Carriers & Tankers +ve growth.
*USA – Construction Spending: public non-residential spending +ve, but private residential is -ve.
*USA – PMI: Still indicating a contracting manufacturing economy.
*Japan – Industrial Production: Overall modest contraction in IP.
by Andrew Pedler | Aug 19, 2019 | Commodity Review, Now Available
USA – Housing Starts, Industrial Production, Electricity End-Use, Bond Yields
Matau’s Comments:
- USA is slowing! Data this week reinforces last week’s OECD CLI implications.
- Base metal inventories continue to remain tight. Most prices are in the ‘nose of pinch-point graphs. Pinchpoint positions are mostly less than 1 week’s consumption. However sentiment (geopolitical) continues to drive prices over fundamentals.
- Several metals (Ni & Co this week) are showing signs that reduced supply is likely to lead to higher prices.
- Outlook is for ‘not enough’ new mine supply in coming years (the next decade), for several key commodities.
The theme of the Resources Rising Stars conference at the Gold Coast earlier this year is appropriate: “Pick the stock, not the market”.
SUMMARY
*Copper Codelco optimistic about long term price for Cu. Short term prices pressured by growth concerns.
*Cobalt Co price is up on news that Glencore is shutting its large DRC mine.
*Nickel Philippines’ largest exporter of ‘high’ grade Ni laterite ore is to shut upon depletion of its Reserves.
*Zinc & Lead ORN calling for ongoing need for more Zn & Cu production. Nyrstar Pb smelter stopped again.
*Tin Trump acknowledges that tariffs increase domestic prices. Delays new tariffs till after Christmas.
Aluminium Beijing announced additional import scrap quotas.
*Gold Gold price gains as faith in Central Banks is about to be tested again.
Platinum & Palladium Progress … of sorts … being made in wage negotiations with AMCU..
*Oil .Russia & China have stuck by Venezuela, though that may change.
Coal A weaker CNY, a safety campaign, shipment restrictions, though premium HCC is preferred.
Iron Ore Beijing’s stimulus restraint driven by low infrastructure spend, impacting prices.
Shipping Baltic indices, Cape, Panamax & Handymax up this week.
*General
Port Hedland – Iron Ore shipments: Shipments down in July after a bumper June effort.
USA – Electricity End-Use: Total demand slowing, mostly in residential demand.
USA – Bond Yields: A historical review + Current 10yr-2yr curves ‘almost’ inverted. 10yr-3mo is!
USA – Industrial Production – Capacity Utilisation: Really slow IP growth. Cap Util is sub optimal.
USA – Housing Starts: House starts almost stalled.
by Marg | Jul 29, 2019 | Commodity Review, Now Available
World Steel and China
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- There is a lot in this week’s issue … reading is recommended.
- World steel output continues positive growth, supported by expected Chinese infrastructure spending, and despite sanctions / tariffs.
- Chinese industry and energy output for June reported largely positive growth. Electricity generation remains strong. The rise of electricity and natural gas is closely connected in the industrial and residential sectors, as these energy sources provide a good match for the needs of lighter industrial sectors and for a population increasingly concerned about local air quality, according to IEA. It is estimated that by 2040, the average Chinese household will consume twice as much electricity as today.
- Base metal inventories continue to remain tight. Most prices are in the ‘nose of pinch-point graphs. Pinchpoint positions are mostly less than 1 week’s consumption. More media commentary is recognising this condition. However sentiment (geopolitical) continues to drive prices over fundamentals.
- The USA Fed meets Wednesday to consider rate cuts. A 0.25% cut is anticipated, however a 0.5% cut would likely change the USA yield curve back, from inverted, to normal. Gold bulls are hoping for the latter cut.
SUMMARY
*Copper Concentrates penalised for As content. TC/RC’s strongly favour ‘clean’ concs.
*Cobalt International consortium plans large Ni-Co plant at Morowali in Sulawesi.
*Nickel Recent Ni rally on ‘not news’ easing. Potential medium term shortfalls for Co, Li, & Ni.
*Zinc & Lead Qld miners hit by anti FIFO rules. Neves Corvo Zn expansion delayed and increased cost.
Tin PT Timah expects to double Sn output in 2019. … may acquire output of illegal miners
Aluminium Canadian Al producers benefit from tariffs, USA consumers do not.
Gold Central Bank Gold Agreement (CBGA) to be discontinued upon expiry.
*Platinum & Palladium Zimbabwe talking (so far) of unwinding high political risk elements, to attract investment.
*Oil Natural gas gaining more traction as best on-demand energy production source.
*Coal Japanese utilities testing off-spec thermal coal products.
Iron Ore Expectations of Chinese infrastructure stimuli continues to support Fe ore prices.
Shipping Capesize & Panamax rates slipped this week.
General
*World Steel: positive growth continues led by China and other Asia.
Marine Traffic & Port of Singapore traffic: Tanker traffic +ve, Bulks & Containers -ve growth.
USA – Interest rates, yields: Fed to consider rate cuts on Wednesday.
USA – Durable Goods, Vehicles, Electronics & Computers: Durables -ve, Vehicles +ve, Elect +ve.
*China – Industrial & Energy Output: more positive than negative growth items.
by Marg | Feb 4, 2019 | Commodity Review, Now Available
Steel and Gold
Comments of particular interest are noted with ‘*’.
Supply issues continue to abound, keeping some tension in most metals markets.
While much is made (fears) of slowing Chinese output data, freight traffic (this week) shows material being transported about the country is growing at pace. Also (see last week’s issue) electricity output/demand continues to grow strongly.
A new data page has been introduced at the back – your feedback is appreciated.
SUMMARY
*Copper “Don’t listen to what miners say. Look at what they do”. Cu outlook is tight!
*Cobalt Co sales from DRC delayed further, on government concerns of U-removal technology.
*Nickel Ni market slowly tightening. Analysts continue to see deficits ahead.
Zinc & Lead AZI’s progressing eval’n of Zorzone. Zn prices high on concerns of weak Chinese refined output.
Tin Alternative Sn supplies drawn down as Indonesian uncertainty continues.
Aluminium Chinese smelters alternately are re-opening and shuttering capacity. Electricity prices becoming an issue.
Gold Central Bank buying at 2nd-highest levels on record, highest since 1971.
*Platinum & Palladium WPIC outlook for refined Pt output to grow on increased South African and USA production.
Oil America is producing the wrong kind of oil, for many refineries, and limiting global heavy oil output.
Coal China’s import controls disrupting only Australian coal, so far.
*Iron Ore Iron ore market forecast to move into deficit this year on Brazilian supply issues. Price up on Brazilian dam breaches.
Shipping Rates impacted by looming Chinese New Year (5 Feb) and Brazilian dam breaches.
General
*World Gold Council: Gold Supply & Demand – Dec Qtr is often a high demand Qtr.
*World Steel: positive growth continues, for the world, driven by the few.
*China – Freight traffic: strong growth. A lot of material is being moved in China.
USA – Construction Spending: growth is positive, slower, (and more sustainable).
by Andrew Pedler | Nov 25, 2018 | Commodity Review, Now Available
LME metal inventories continue to decrease, tightening base metal markets even more. A variety of issues are disrupting each of the commodity markets.
SUMMARY
*Copper 2018 is turning out to be a surprisingly almost disruption-free year.
*Cobalt Cobalt supply growth might not be able to keep up with demand growth.
*Nickel It is easy to wax lyrical about reducing metal content in batteries. It has to be commercial, & work!
*Zinc & Lead Zn concentrate demand constrained by disrupted demand from smelters. Market is still tight.
Tin Sn solder expected to see boosted demand from ~2022-25 from EVs.
Aluminium WTO to consider opening investigation into USA’s section 232 Al & steel tariffs.
Gold Looking toward the G20 summit at end Nov, and potential for agreement between USA & China.
Platinum & Palladium Zimbabwe continues plans to build a refinery for PGMs & base metals.
*Oil G20 summit meetings may pre-empt the OPEC meeting in early Dec. US producers hit by prices!
Coal China’s port restrictions playing havoc with (spot) trade.
Iron Ore Falling Chinese steel prices reduced demand for high quality iron ore.
Shipping Bulk freight rates decline for a fifth week.
General
*USA TWI – correlations with commodity prices: Best for gold, and variable otherwise.
USA – Housing Starts: Down in the NorthEast and South regions in particular.
USA – Industrial Production & Capacity Utilisation: slowed a bit, but steady growth.
USA – Durable Goods, Vehicles & Electronics & Computers: growth in durables & vehicles.
