Commodity Review 20190308 by Andrew Pedler – Now Available

Commodity Review 20190308 by Andrew Pedler – Now Available

Australia Exploration,  USA

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

Australian exploration spending is recovering, showing confidence in the medium to longer term, despite current geopolitical and sentiment noise.  The world is still looking for resolution to trade and tariff wars, and is starting to look through the noisy rhetoric of political announcements for the likely real impacts.  

This week, analyst comments on China see through the high level PMI numbers, showing that commodities imports are in fact growing.  

Toyota’s thinking on EVs is more commercial than most.


*Copper  China’s imports of Cu ‘concentrates’ at new highs, though import of ‘refined’ Cu dipped.

*Cobalt  Lesson in boom-bust, though the Co outlook remains good.  It is all the timing of supply & demand.

*Nickel  Toyota’s battery philosophy!  INSG forecasts a fourth year of deficits for Ni.

Zinc & Lead  Glencore agreed Zn TCs with subsidiary Noranda Income Fund.  Secondary Pb to be ShFE listed.

Tin  Suspension of PT Surveyor Indonesia has ended, and it is able to export again.

Aluminium  Aluminium Bahrain (Alba) ramping up its line-6 potline.

*Gold  Monetary tightening expectations eased.  USA February jobs data is encouraging (patience).

Platinum & Palladium  Details of the world’s eight largest palladium producers.  Pd price is approaching 2x Pt price !

*Oil  A myriad of factors:  Expect USA to be disciplined by prices, and Saudi & Russia balance the mkt.

Coal  Seaborne HCC prices buoyant.  Thermal negotiations under way.  USA coal shipments hindered.

Iron Ore  China’s iron ore imports at a 10 mo low in February.

Shipping  Cape rates still suffering.  Panamax & Supramax rates are up.


*Australia – Mineral & Energy Exploration:  Mineral & Petroleum spending continued recovery.

*Port Hedland – Iron ore shipments:  Small positive 12 mo growth for yr to February.

*China:  Caixin & NBS PMIs & GDP – Clyde says ‘look at commodity imports’.

*USA – House Starts:  Negative growth though better than December’s fall.

*USA Construction Spending:  slow positive growth but residential spend is down.

Commodity Review 20190308 by Andrew Pedler – Now Available

Commodity Review 20190301 by Andrew Pedler – Now Available

World Steel,  USA

Comments of particular interest are noted with ‘*’.

Matau’s Comments:

Geopolitical factors continue to drive uncertainty in global investment and industrial markets.  However there are signs that some of the key factors:  Trade / tariff wars, and some sanctions may abate in the near term (USA-China, USA North Korea, USA sanctions on Rusal).  Others remain:  (Venezuela, Brexit).

CRU’s analysis of the iron ore  / steel industry highlights China’s structural reform of its steel industry, reducing capacity from 1,250 Mtpa to 1,000 Mtpa but becoming profitable.  According to CRU, shifts in demand for steel raw materials will also be driven by forecast increased scrap steel usage in China, offset somewhat by demand growth from SE Asia-Five. 

World steel production clearly shows that virtually all the growth in production has been from Asia, rather than the developed world.  That is not forecast to change.  

Base metals’ fundamentals are tight, and getting tighter, and sentiment appears to be starting to refocus, (or is it just a glance), on the state of supply / demand. 

Matau’s expectations are for a broadly sluggish 2019, by weak growth from advanced economies, offsetting growth from emerging economies, with stronger pickup in fundamentals broadly occurring in 2020 (as outlined by OECD CLI).  We believe this is influenced also by the fact that most global news systems are from advanced economies, whose own lethargic performances may be ‘news’ ahead of more distant ‘emerging’ economies where the real growth is from.  We need to be watching the news from emerging economies:  economics, elections, major holidays, political policies and shifts in direction. 

We believe much will hinge on when and how the current suite of geopolitical uncertainties are resolved. 

Commodity Review 20190308 by Andrew Pedler – Now Available

Commodity Review 20181123 – USA – by Andrew Pedler

LME metal inventories continue to decrease, tightening base metal markets even more.  A variety of issues are disrupting each of the commodity markets.   


*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.


*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.

Commodity Review 20180824 by Andrew Pedler – Now Available

Commodity Review 20180824 by Andrew Pedler – Now Available



*Copper  USA & China ended trade talks with no major breakthrough.

*Cobalt  Delays in rollout of 811 NCM batteries.  Expected some years away for major adoption.

Nickel  Nickel market in deficit during Jan-Jun 18, and for all of 2017.

Zinc & Lead  Global Zn concentrate inventories have been at low levels since early 2017.  Pb market is in deficit.

Tin  LME will require DRC produced copper to be audited to prove it is ethically sourced.

Aluminium  In USA old Al smelters are being restarted.  In Russia they are being closed.  China is unaffected.

Gold  Price holding above psychological USD 12,000/oz level after Fed Chairman’s remarks.

Platinum & Palladium  Platinum industry marketing into jewellery markets, with some success.

*Oil  Oil prices up on Iran sanctions taking effect and concerns about USA-China trade wars.

Coal  Met-coal usually deals with cyclones & tight supply/demand.  Trade wars add more uncertainty.

Iron Ore  Singapore Exchange is adding a high-grade iron ore contract to its markets.   BCI, MIN, BCK

Shipping  Cape & Panamax rates up on demand.  Bad weather has tightened availability of ships.


*Japan – Orders to Machinery.  Japan’s industry is showing a recovery from post GFC events.

Pinch Point updates:  Inventories continue edging downward.  Contangos tighten. Prices up.

USA New Housing Starts:  Down slightly in July but improved on June.

USA Durable Goods, Vehicles, Electronics:  positive growth.