Commodity Review 20190726 by Andrew Pedler – 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.


*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.


*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.

Commodity Review 20190201 by Andrew Pedler – Now Available

Commodity Review 20190201 by Andrew Pedler – 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.


*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.


*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).

Commodity Review 20190201 by Andrew Pedler – Now Available

Commodity Review 20181130 by Andrew Pedler – Now Available

Global steel production reflects industrial and economic activity.  For October the highlights are a surge from China and more widely, including from “other world”. 

Pinch point graphs for the base metals continue to show tightening markets with reduced exchange inventories, with perhaps the beginnings of price responses.

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


*Copper  The big guys, FMG, BHP, RIO all increasing focus on copper exploration (and discoveries).

Cobalt  Industrial customers working toward better conditions for DRC miners.

Nickel  Ni market described as tight in China.  Demand increasing.

*Zinc & Lead  Zn: stocks falling, backwardation deepening.  ORN discovery.  Pb – China now a net importer.

Tin  If MIT is right in its findings, there is a slow-burn bull fuse smoking away in the tiny tin market.

Aluminium  Primary Al production will not meet demand in 2019 say Norsk Hydro.

*Gold  The China-USA G20 ‘agreement’ is not so much an agreement as a 90 day ‘ceasefire’.

Platinum & Palladium WPIC increased its forecast for a Pt surplus.

*Oil  USA about to become a net energy exporter.  OPEC and others considering restrictions.

*Coal  Tariffs and Trade-wars:  Jobs are created with fanfares.  Jobs disappear quietly.

Iron Ore  High grade ore premia have been hit hardest in China.

Shipping  Capesize rates rebounded on iron ore and agri-trade.


*World Steel:  Strong growth, particularly a surge in growth from China, and globally more widely.

Commodity Review – 20180928 -by Andrew Pedler – now available

Commodity Review – 20180928 -by Andrew Pedler – now available


*Copper  Copper’s current positive internal dynamics are increasingly at odds with its price.  It is not alone.

*Cobalt  DRC cobalt is favoured because of availability, and low As levels.

*Nickel  International consortium looking to produce Indonesian Ni for EV batteries.

Zinc & Lead  Zn Air batteries – developed and in use, for stationary storage.

Tin  ITA forecasts a slowdown In Sn demand growth, due mainly to Chinese growth rate expectations.

Aluminium  Notes at Metal Bulletin’s Aluminium Conference – Berlin.  Tariffs will not solve China’s overcapacity.

Gold  Prices are seeing little reaction & remain below key psychological level of USD 1,200/oz.

Platinum & Palladium  Zimbabwe’s policy changes aimed at attracting investment.  More change may be needed.

*Oil  The OPEC agreement has been well managed.  But, more oil needs to be discovered.

*Coal  Fire at North Goonyella!  South Africa’s new Mining Charter may need further revision(s).

Iron Ore  Chinese policy of shutting inefficient polluting mills drives demand for high grade feed materials.

Shipping  Panamax rates up while Cape rates flat, ahead of China’s October week holidays.


*South American Exchange Rates:  Chile, Peru, Argentina, Brazil.

*Base Metal PinchPoint graphs:  Inventories continue to reduce (except Sn).

*World Steel:  Healthy August yr-on-yr and 12-month yr-on-yr growth.

*Seaborne Coking Coal:  Australia dominates seaborne coking coal supply but patterns are shifting.

USA – Durable Goods, Vehicles, Electronic goods:  strong positive growth.

Commodity Review – 20180928 -by Andrew Pedler – now available

Commodity Review 20180727 by Andrew Pedler – Now Available


Copper  Cu set for price increases from several factors.

Nickel  Metal Bulletin opens a price spec for China ex-works NiSO4.

Zinc & Lead  Zn short-sellers may have hit a bear trap.  G1A drilling to complete in August.

Tin  ELT MOU in Malaysia.

Aluminium  Gyrations on US tariff changes/retractions.  Pressure off Rusal.  Deficit ahead.

Gold  Price may endure a seasonal ‘lull’ then rise in September.  Autumn in China is high-demand.

Platinum & Palladium  Unprofitable SA shafts closed.  Mines not expected to close near term.

Oil  Global oil consumption increased to a new record high in 2017.

Coal  Coking coal markets seeking direction.  Thermal prices down on reduced interest (on low CNY?)

Iron Ore  Iron ore markets relatively calm, despite Trump’s tariff threats.

Shipping  Capes upon iron ore demand, and Panamax rates also up.


World Steel:  broadly positive growth including a surge in Chinese output.

PinchPoint updates:  Ni, Zn, Pb then Cu positions in particular, indicate tight markets.

USA – Durable Goods, Vehicles, Electronic Products:  good growth.