Author: Marg

Commodity Review 20220114 by Andrew Pedler – Now Available

Commodity Review 20220114 by Andrew Pedler – Now Available

Ports & USA-IP

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

·                     Base metal markets remain excruciatingly tight!  

·                     High power costs are widely impacting global smelters’ output(s).

·                     The Chinese New Year (Year of the Tiger) begins 01 February 2022, with a week long holiday break  for many operations.

    • 2022 is a year of the Tiger, starting from February 1st, 2022, and ending on January 21st, 2023.  It is a Water Tiger year.
    • The Tiger is known as the king of all beasts in China.  The zodiac sign Tiger is a symbol of strength, exorcising evils, and braveness.  

·                     Iron ore offtake from Port Hedland in December was strong, as (many of them Asian) smelters and furnaces stock up ahead of Chinese New Year breaks. 

·                     Japan’s offtake of iron ore has resumed growth.  It will be interesting to see Japan’s December IP data, when it reports.

SUMMARY  

Copper  Cu price up on positive sentiment.  NRX’ projects in Namibia are of interest.

Cobalt  Demand for Co and Co intermediate products is growing.  

Nickel  Ni price at highest in a decade on concerns about supply and stock levels. 

Zinc & Lead  Fitch revised Zn forecast prices upward.   China removed import tariffs on lead battery scrap.

Tin  KLTM tin price at historic high levels. 

Aluminium  Soaring electricity prices in Europe have triggered cuts in aluminium production. 

Gold  Au prices down Friday but up on the week, on a weaker USD and mixed economic releases. 

Platinum & Palladium  A summary of uses and investment appeal..

Oil  China’s annual crude oil imports for 2021 were reduced for the first times since 2001.   

Iron Ore  Market is looking for indications of China’s policy after the Winter Olympics. 

Shipping  Dry Bulk was good in 2021, looks promising for 2022.  Indonesia allows some thermal coal exports.

General 

Port Hedland – Iron ore:  December offtake was strong.  SE Asian demand ex China is growing: 

Port of Singapore:  Container traffic is becoming more robust, though bulks traffic is down .

USA – IP & Capacity utilisation:  IP has resumed modest growth rates.  Cap.Utiln is improving.

Bond Yields:  Long term yields are approaching pre-pandemic levels.

Commodity Review 20220114 by Andrew Pedler – Now Available

Commodity Review 20220107 by Andrew Pedler – Now Available

USA

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • Base metal markets remain excruciatingly tight!  
  • High power costs are widely impacting global smelters’ output(s).

SUMMARY  

Copper  Cu price is watching equities, supply & interest rate expectations. 

Cobalt  Outlook for cobalt prices is higher..  

Nickel  Reduces supply disruption in Indonesia & Philippines to assist supply. (still tight). 

Zinc & Lead  Korea Zinc – Sun Metals agrees to renewable power supply MOU’s . 

Tin  Outlook for 2022 softened slightly on increased supply. 

Aluminium  A major aluminium smelter in France is to reduce production, on high power costs. 

Gold  The gold price reaction suggests the market is focussed on inflation risks. 

Platinum & Palladium  Podium Minerals (POD):  extending mineralisation for Resources.

Oil  Doubts emerge as to OPEC+’s ability to increase output (to forecast levels) quickly. 

Iron Ore  China’s demand expected to increase after the Beijing Olympics.. 

Shipping  Indexes for Capesize & Panamax increased though Supramax & Handysize reduced..

General 

Australia – USA – Yields:  Yields now rising and expected to increase further.

Baker Hughes – Rig Counts:  Rig counts increasing on higher oil prices and recovery expectations.

USA Construction Spending:  Growth still dominated by Private & Residential spending.

Commodity Review 20220114 by Andrew Pedler – Now Available

Commodity Review 20211231 by Andrew Pedler- Now Available

Nickel – Japan, South Korea

Dear Margaret

(ref no: 902)

Wishing you a Happy & prosperous New Year for 2022., and the ability to travel (safely when you want to)!  

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • Nickel outlook is for need for considerable expansion for stainless steel alone.
  • Copper outlook is for significant demand growth. 
  • Base metal markets remain excruciatingly tight!  
  • Japan’s IP is recovering well. 
  • South Korean IP appears to have resumed an upward growth tre3nde.
  • High power costs are widely impacting global smelters’ output.

SUMMARY  

*Copper  China’s factory activity unexpectedly accelerated in December.  The world needs much more Cu.

*Cobalt  The global cobalt supply chain is relatively fragile, sensitive to disruption.   

*Nickel  Primary nickel consumption to rebound yr-on-yr due to stainless steel capacity expansions alone. 

*Zinc & Lead  Power costs threaten production.  Ag-rich Pb concentrates are in demand.

Tin  Myanmar concentrate supply issues unable to be covered by Australian and Bolivian supply. 

Aluminium  Norsk Hydro cuts Slovakian output due to power costs. 

Gold  Price fell year-on-year though has risen in recent weeks.  Price drivers are the usual suspects.

Platinum & Palladium  Prices have reduced this year, though ongoing auto demand is rising.

*Oil  China continues to rely in the Middle East for oil supply. 

Iron Ore  Prices registered first annual decline in three years. 

Shipping  The dry bulk market fared much better than the tanker market, during 2021..

General 

South Korea – Industrial Production:  Recovering well from covid-19.

Japan – Industrial Production:  IP is recovering, supported by steel & machinery (& other).

Commodity Review 20220114 by Andrew Pedler – Now Available

Commodity Review 20211224 by Andrew Pedler – Now Available

USA – Germany – UK

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • Saudi’s oil exports soared!  
  • Base metal markets remain excruciatingly tight! .
  • Gold markets still range trade, pressured by uncertainty and improving economic outlooks.  Everyone has a different time horizon.
  • USA’s economy, appears, over all, to be recovering.
  • China – keep watching for the Winter Olympics and particularly estimates for what China will do during and afterwards (politically and economically).

SUMMARY  

Copper  Protesters agreed to lift a blockade of one of Peru’s biggest copper mines. 

Cobalt  Cobalt has the potential to extend gains in 2022 after doubling in price this year.  

Nickel  LME nickel and the (Chinese) domestic pure nickel inventories have continued to hit new lows. 

Zinc & Lead  Zinc prices touched a two-month high on Wednesday on persistent worries about supply. 

Tin  SRZ:  Assay results at Severn (Tas) have confirmed wide zones of high-grade tin mineralisation. 

Aluminium  European Union will place extra tariffs on aluminium foil coming from China. 

Gold  Thin trading and Christmas buying are keeping gold above the USD 1,800 level. 

Platinum & Palladium  Palladium’s price had an eventful year.  

Oil  Saudi Arabia’s oil exports soared in October as it benefited from higher crude prices. 

Iron Ore  Iron ore, a barometer for China’s economy and driver of the AUD, is having its wildest year ever. 

Shipping  Ocean freight costs are likely to remain high in 2022.  

General 

USA – Industrial Production:  IP continues to recover.  Capacity Utilisation has improved rates.

USA – Housing Starts:  positive growth (dominated by two regions with the other regions slowing).

USA – Durable Goods:  Durables show strong recovery, Vehicles weak!  Electronics are more solid.

UK – Industrial Production:  IP reports slow +ve growth, though at levels below ‘pre-covid’.

Germany – Industrial Production:  IP reports slower -ve growth, after peaking in 2017.

Commodity Review 20220114 by Andrew Pedler – Now Available

Commodity Review 20211212 by Andrew Pedler – Now Available

Pt Hedland, USA-CPI

Dear Margaret

(ref no: 902)

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • Australia’s CPI has increased to a relatively comfortable 3% (Sep21Qtr) while USA’s CPI has jumped to >6% in November.
    • The USA CPI jump has had impacts on outlook for commodities, outlook for sentiment driven markets (gold).
  • China’s CNY has been progressively increasing in value against USD (over the past 18 months).  PBoC has indicated it will lighten its controls over the trading of CNY. 

SUMMARY  

*Copper  The global refined copper market is expected to be in a significant surplus in 2022. 

**Cobalt  Power struggle developing for access to cobalt supply, & other ‘Clean Energy’ metals..  

*Nickel  Primary Ni market may move to surplus but ‘class 1’ nickel may remain in deficit.  

*Zinc & Lead  Zn TCs increased.  ‘Renewable hydrogen facility planned for Port Pirie SA. 

Tin  Chinese tin output reduced on output restrictions. . 

Aluminium  Chinese output constraints are skewing the market. 

Gold  Price moved by USA CPI and USA 10yr yields’ impact on fiscal policies. 

*Platinum & Palladium  Reduced demand for both Pt & Pd is over semiconductor chip shortages. 

*Oil  Prices up buoyed by easing sentiment over the Omicron coronavirus variant. 

Iron Ore  Prices slipped on rising China ports inventory.

Shipping  Baltic indices reduced Friday though increased for the week.

General 

*Inflation – USA & Australia:  USA inflation rockets to >6%.

*USA Purchasing Managers’ Index:  Outlook reported at a strong >60 level.

*Port Hedland – Iron Ore Exports:  +ve growth from China, Japan, Taiwan, Indonesia & Vietnam