Commodity Review 20190418 by Andrew Pedler – Now Available

Commodity Review 20190418 by Andrew Pedler – Now Available


Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • OECD Composite Leading Indicators (CLIs) continue to show a generally sluggish ‘developed economy’ world, and growing ‘emerging’ economies.
  • Base metal inventories remain tight, though some prices are just starting to reflect fundamental positions.  Uncertainties generated by geopolitical activities continue to hinder normal trading conditions, though a sense of some certainty or time-frames to outcomes, appears to be calming some of the market nerves.  
  • USA data is showing several aspects of slowing growth.  (Industrial Production, Housing Starts) 
    • Matau notes that in January 2006, the New Housing Starts and Residential Construction Spend data both commenced prolonged downturns culminating in the global financial crisis.  Both these sets of data are worth pondering and are graphed in this issue.  I am not suggesting we are up for a repeat, rather I am amazed that such turning points seemed to attract so little attention over the following two years.



*Copper  Chile’s Cochilco forecasts Cu prices of USD 3.05/lb for 2019, and USD 3.08/lb for 2020. .

*Cobalt  Basic economics of supply & demand have not changed.

Nickel  Price supported by hopes that China’s stimulus is translating into stronger growth.

*Zinc & Lead  Analysts expect increased Zn mine supply (Zn concentrates) in 2019.  Digital Pb battery map.

Tin  LME needs to review & revise its rules for metals’ warehousing.

Aluminium  China’s Al production reduced in March, potentially related to capacity cuts.

Gold  Venezuela sold USD400m of its gold holdings.

Platinum & Palladium  Zimbabwe to name two new investors in separate new Pt mine ventures.

*Oil Drilling in USA shale districts slowing down.  USA to review its Iran sanctions in May

Coal  LVPCI price contracts for the Mar19Qtr finally settled by majors.

Iron Ore  Prices down as Brazil’s Bucutu set to reopen.  Aust. exports post cyclones expected to increase.

Shipping  Freight rates rose across major Asian routes this week.


*Electric vehicles:  Can global mine-supply meet the manufacturers’ high growth forecasts?

**OECD Composite Leading Indicators:  .

*USA – Construction Spend:  Private & Residential spend was down.  Public and NonRes was up.  Note the downturns in Residential in Jan 2006.

USA- Durable Goods, Vehicles, & Electronics:  Durables OK, Vehicles strong, Electrics OK.

USA Industrial Production & Capacity Utilisation:  USA appears to be slowing down.

*USA – New Housing Starts:  Total House Starts down.  Note also the downturns in Housig Starts in Jan 2006.