Commodity Review 20191011 by Andrew Pedler – Now Available

Commodity Review 20191011 by Andrew Pedler – Now Available


Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • Lithium:  South American miners are struggling to put downstream added value projects into place. 
  • The USA – China tariff talks & trade wars The recent “phase 1” agreement details have yet to see the light of day.   
  • Base metal inventories continue to remain tight.  Low base metal inventories are beginning to get more attention in the media than previously. 


*Copper  Strikes in Peru to affect output.  RIO exploring (JV) in China.

Cobalt  GEM Co agreement with Glencore for provision of cobalt hydroxide.  Supply is ‘precarious’.

*Nickel  Ni market is concerned about potential future supply shortfalls.

Zinc & Lead  ZMI hits high grade Zn.  NCZ achieves stable Zn operation.  EPA lead pipe rules changed.

*Tin  Chinese refined Sn output down on reduced feedstock supply.  Conflict minerals’ compliance.

Aluminium  A gap between alumina prices in China and in rest-of-world. Alunorte returns to production.

Gold  High gold price dampens Indian buying ahead of Diwali festival.  The world is nervous.

Platinum & Palladium  Merger agreed for Implats to acquire North American Platinum.

Oil  Attacks on Iranian tanker escalates issues.  USA to send troops to Saudi Arabia.

Coal  Aust coking coal exports increased.  Chinese buyers acting ahead of expected port restrictions.

Iron Ore  China’s Tangshan city extended steel production restrictions, that may favour lump iron ore.

Shipping  New fuel regulations making freight rates more volatile.


*Lithium:  supply chain issues for South American countries.

Port Hedland Iron Ore:  China extended restrictions on steel mills that may favour lump ore..

*PinchPoint Graphs:  tightening further and beginning to get price responses.

*Japan – LNG prices:  Higher oil prices and ship-fuel costs could boost LNG prices further.

Commodity Review 20191011 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 20191011 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 20191011 by Andrew Pedler – Now Available

Commodity Review 20190208 by Andrew Pedler – Now Available


Comments of particular interest are noted with ‘*’.

Supply issues continue to abound, keeping some tension in most metals markets.  This week it is copper.

While much is made (fears) of slowing Chinese output data.   Michael Pettis – professor of economics at Beijing University, has written a note “What Is GDP in China?” detailing the various ways of recording GDP, and how China reports. He suggests China’s actual GDP growth rates may be quite different, and lower, than are reported.  To better understand reporting of GDP everyone should read this note.  It is also available in Andrew’s Blog on the Matau website.

Matau has, in recent issues, noted slower (negative) growth in Chinese industrial output, though quite healthy growth rates in electricity demand and in freight (all modes) within China, among other select data, air conditioners, colour TVs, and bullet trains,, which suggest that these reflect aspects of growth that is not being captured in the other data Matau collects.  


*Copper  Chile:  rain suspends output.  DRC: Glencore shedding labour.  (affects Co as well).

*Cobalt  LME proposal re: Co contract (free of human rights abuse) needs a better audit process.

Nickel  BHP revitalising its Nickel-West operations.   China-USA trade talks ahead of 02Mar19 deadline.

Zinc & Lead  ORN: Prieska BFS due June19Qtr.   G1A:  40% stake sale to Toho Zinc.

Tin  Sn market deficit for Jan-Nov18.  Chinese & Japanese demand reduced.

Aluminium  Global Al market to see a number of deficits over the next few years.

*Gold  Bank of England withholds Venezuelan (Maduro’s) request to release Venezuelan Au on deposit.

Platinum & Palladium  Sth Africa to launch national Pt strategy, to support its economy.

*Oil  Venezuelan tankers anchored off USA pending payment (into ‘blocked’ accounts).

Coal  Expect Chinese market support post Chinese New Year.  Level of support is currently not certain.

Iron Ore  Price jumped post Brazilian dam failures.  Expect clearer price signals post Chinese New Year.

Shipping  Cape rates fell on dam breaches.  Panamax and Supramax rates down this week also.


*Pt Hedland Iron ore shipments:  Positive growth at slow rates.  Strongest to India & Sth Korea.

*USA PMI:  continues with a strong outlook.

*Japan – Industrial production, vehicles and electricity:  negative growth


Commodity Review 20180914 by Andrew Pedler – Now Available

Commodity Review 20180914 by Andrew Pedler – Now Available

AUD Price XY Plots

This week’s comments of particular interest are noted with ‘*’.


*Copper  Chile studying a proposal to increase mineral royalties.  Support for the bill is doubtful.

Cobalt  COB  begins large drill campaign.   HAV  completed metallurgical drilling

*Nickel  Several global metals producers looking toward Indonesian Ni via HPAL for EV markets.

Zinc & Lead  NCZ delivering Zn conc. via pipeline to Karumba.  TZN DFS on Tala Hamza-Amizour.  PEX’s Wagga Tank

Tin  ITA estimates increased refined tin demand in 2017.

Aluminium  Iran’s Al consumption increased by 12% in 2017.

Gold  Gold price forecast to be rangebound pending delivery of Federal Reserve rates expectations.

Platinum & Palladium  South African Pt production continues, supported by a weak ZAR, but margins are challenging.

*Oil  China’s oil production up marginally. Oil & gas imports up markedly.

Coal  Coking coal demand from India and China supporting prices.  Adani redesigned its rail plans

Iron Ore  China’s steel output eased in August after record highs in July.

Shipping  Cape rates up, Panamax rates up as well.


AUD / commodity XY plots:  generally a relationship with AUD following prices.

Port Hedland – Iron ore Shipping:   Shipments to China up almost 10%.

Port of Singapore – ship traffic:   Total traffic down but container traffic up.

USA PMI:  strong outlook.

USA Industrial Production & Capacity Utilisation:  strong IP growth, and Cap.Ut rising.

Japan – LNG prices:   Contract prices following oil prices (up).