Commodity Review 20190208 by Andrew Pedler – Now Available

Commodity Review 20190208 by Andrew Pedler – Now Available

by | Feb 11, 2019 | Commodity Review, Now Available

Venezuela

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.  

 SUMMARY  

*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.

General 

*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 20190208 by Andrew Pedler – Now Available

Commodity Review 20190201 by Andrew Pedler – Now Available

by | 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).