Author: Marg

Commodity Review 20201120 by Andrew Pedler – Now Available

Commodity Review 20201120 by Andrew Pedler – Now Available

Singapore

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to be widely comfortable with the USA election outcome of a President-elect Joe Biden:

  • More Republicans are moving support toward an orderly transfer of power.  So far Trump shows no sign of doing that.  
    • USA needs to make sure the ‘lame-duck’ does not cripple something else.
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil).   Several commodity outlooks cite ‘recovery’ though there is still a likelihood that Covid-19 will dampen forecasts. 
  • Gold price outlook remains replete with potential catalysts.  Goldman Sachs retains its bullish outlook.
  • Base metals’ prices lifted markedly upon reducing exchange stocks and expectations of improving outlook via stimuli.
    • However it is unlikely that Covid-19 influence has finished yet, variably impacting both demand and supply.
  • Oil market is watching the looming OPEC+ meeting for 30Nov-01Dec.
  • Coal markets continue to have sub-optimal trade patterns due to China’s (unofficial) restrictions on Australian exports.  
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.
    • Singapore shipping growth has slowed markedly, reflecting slower pace of Asian trade growth, mostly due to COvid-19 disruptions.
    • China’s demand for steel and copper has surged. 

SUMMARY  

*Copper  Stronger than expected demand from China has driven a price surge, supported by fundamentals.  

Cobalt  Volkswagen joined the DRC Cobalt for Development Initiative.  

Nickel  USGS summary of nickel markets.

*Zinc & *Lead  Zn emerges as a surprising star performer, on supply issues.  These are not GFC conditions.

*Tin  Demand for ‘critical metals’ is skyrocketing to meet renewable-energy goals.  Supply issues.  

Aluminium  The future of Victoria’s struggling Portland aluminium smelter should be known soon.

*Gold  Forecasts for the USA economy, and for gold price, vary. 

*Platinum & Palladium  WPIC forecasts a second deficit year for Pt.  Demand for Pt is growing.  Potential for substitution.

*Oil  OPEC+ talks 30Nov-01Dec, and growth outlook are key to considering extending quotas. 

Coal  China’s ‘unofficial’ bans on imports of Australia material is leading to suboptimal trade patterns.

*Iron Ore  China’s crude steel consumption is up strongly.  Steel mill inventories are down.

Shipping  Oncoming Brazilian wet season pushing freight rates higher, adding to China-Australia tensions. 

General 

*Port of Singapore – Shipping:  reduced bulk traffic with slow tanker traffic & flat container traffic.

*Japan – Industrial Production:  recovering from Covid-lows but still -ve yr-on-yr growth

*USA – Industrial Production:  Continuing negative yr-on-yr growth.

*USA – Housing Starts:  Growth in Starts has been strong for 2x months.  Still at late 90’s levels.

Commodity Review 20201120 by Andrew Pedler – Now Available

Commodity Review 20201113 by Andrew Pedler – Now Available

China Bans

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to be widely comfortable with the USA election outcome of a President-elect Joe Biden:

  • Some concerns regarding the USA election outcome are:
    • Markets still contemplating a period of little change (Democrat President & Congress, but a Republican Senate), meaning no radical changes expected.
    • Transfer of power (20 Jan) still looks contentious. 
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil).   Several commodity outlooks cite ‘recovery’ though there is still a likelihood that Covid-19 will dampen forecasts. 
  • Gold price outlook remains replete with potential catalysts.   Goldman Sachs bullish outlook.
  • Base metals’ prices lifted upon expectations of improving outlook via stimuli.  However it is unlikely that Covid-19 influence has finished yet.
    • Fundamentals for most base metals remain strong.  
  • Oil market prices lifted.
  • Coal markets remain uncertain regarding China’s (unofficial) restrictions on Australian exports.  
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.

SUMMARY  

Copper  Cu prices responding to strong Chinese demand and South American supply disruptions. 

Cobalt  Roskills forecasts steady demand growth for CO to 2030.    

Nickel  .Ni price up on near term supply/demand.   Mid term supply growth is expected to soften outlook.

Zinc & Lead  RVR is mining higher grade polymetallic ore.   IBG is progressing bank financing for Citronen.  

Tin  AfriTin continue to ramp up Uis Sn mine in Namibia.       

Aluminium  ABX progressing Binjour toward production of metallurgical grade bauxite in Qld.

Gold  USA election has a new President-elect (Joe Biden).  However control of covid-19 is also required. 

Platinum & Palladium  Pt demand forecast down in 2020, however growth is then expected out to 2024. 

Oil  Covid travel restrictions are impacting oil prices.  OPEC considering extending production cuts.

Coal  Very little clarity yet with regard to Chinese restrictions on imports from Australia. 

Iron Ore  Seaborne iron ore prices expected to decrease in Dec20Qtr. 

Shipping  Asian freight rates reduced last week on slowing steel activity, and seasonal weaker winter buying.

General 

USA – Electricity End Use:  Industrial usage normally falls at mkt ‘crashes’, and recovers poorly.

Baker Hughes Rig Counts:  Rig counts recovering tentatively with increases in oil price (from lows).

USA – PMI:  OMI firmed upward (in most segments) suggesting a stronger outlook.

USA Construction Spending:  Again, positive growth only for private & residential  spending.

Japan – LNG Prices:  prices recovered slightly. 

Commodity Review 20201120 by Andrew Pedler – Now Available

Commodity Review 20201106 by Andrew Pedler – Now Available

USA

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to be widely comfortable with the USA election outcome of a President-elect Joe Biden:

  • Some concerns regarding the USA election outcome are:
    • Markets contemplating a period of little change (Democrat President & Congress, but a Republican Senate), meaning no radical changes expected.
    • However Trump will still be an influence (legacy) on the Republican Party.
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil). 
    • Covid-19 limitations are impacting oil prices
  • Gold price outlook remains replete with potential catalysts.   
  • Base metals continue to jostle for recognition of market conditions, but the world markets have been distracted by more noisy and volatile activities.
    • Fundamentals for most base metals remain strong.  
    • Cu appears to be the considered leading base metal, followed by Ni then Zn.  Each market is actually tight.  
  • Oil markets are struggling at low prices, driven by broadly lower demand. 
  • Coal markets are still uncertain regarding China’s (unofficial) restrictions on Australian exports.
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.

SUMMARY  

Copper  Cu prices responding to strong Chinese demand and South American supply disruptions. 

Cobalt  Roskills forecasts steady demand growth for CO to 2030.    

Nickel  .Ni price up on near term supply/demand.   Mid term supply growth is expected to soften outlook.

Zinc & Lead  RVR is mining higher grade polymetallic ore.   IBG is progressing bank financing for Citronen.  

Tin  AfriTin continue to ramp up Uis Sn mine in Namibia.       

Aluminium  ABX progressing Binjour toward production of metallurgical grade bauxite in Qld.

Gold  USA election has a new President-elect (Joe Biden).  However control of covid-19 is also required. 

Platinum & Palladium  Pt demand forecast down in 2020, however growth is then expected out to 2024. 

Oil  Covid travel restrictions are impacting oil prices.  OPEC considering extending production cuts.

Coal  Very little clarity yet with regard to Chinese restrictions on imports from Australia. 

Iron Ore  Seaborne iron ore prices expected to decrease in Dec20Qtr. 

Shipping  Asian freight rates reduced last week on slowing steel activity, and seasonal weaker winter buying.

General 

USA – Electricity End Use:  Industrial usage normally falls at mkt ‘crashes’, and recovers poorly.

Baker Hughes Rig Counts:  Rig counts recovering tentatively with increases in oil price (from lows).

USA – PMI:  OMI firmed upward (in most segments) suggesting a stronger outlook.

USA Construction Spending:  Again, positive growth only for private & residential  spending.

Japan – LNG Prices:  prices recovered slightly. 

Commodity Review 20201120 by Andrew Pedler – Now Available

Commodity Review 20201030 by Andrew Pedler – Now Available

World Gold – China transport

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to collectively be taking long and deep breaths.

Concerns ahead include:

  • The USA election, for which many are now believing Biden’s lead is large enough to provide a victory”
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil).  ,
  • Gold price is awaiting some clearer direction:  We believe there is some optimism for recovery stimuli being promoted, and partly a stronger USD (this week).   
  • Base metals are jostling for recognition of market conditions, but the world markets are distracted by more noisy and volatile activities at present.
    • Fundamentals for most base metals remain strong.  … with the market largely waiting for a long heralded demand pickup. 
  • Oil markets are struggling at low prices, driven by broadly lower demand. 
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.

SUMMARY  

Copper  Surging coronavirus infection rates dampen outlook for (USA, Euro, et al)  economic recoveries. 

Cobalt  COB project status listed in Australian Critical Minerals prospectus..  

Nickel Supply issues – Philippines & Australia (WSA).

Zinc & Lead  Comparison of trade conditions for ‘sister’ metals Zn & Pb.   

Tin  AVZ discusses proposal for a Special Economic Zone in DRC!.      

Aluminium  China’s Al juggernaut … running out of road?

Gold  Price stabilising?  No shortage of potential triggers.  

Platinum & Palladium  EV gains in mkt share not likely to be as fast as expected..

Oil  OPEC oil output rising.  Strong demand growth from China & India. 

Coal  China restrictions on Australian  exports still look uncertain as to relaxation.  

Iron Ore  China’s steel output set to breach 1 billion tonnes this year!   

Shipping  Cape rates up, Panamax rates down this week.

General 

World Gold Council:  Global gold trade trends show reactions to Covid & elections.

China – freight & Passenger traffic:  While recovering, levels are still well below pre-covid levels.

USA Yield Curves:  The financial markets do not appear optimistic for about the next three years.

Commodity Review 20201120 by Andrew Pedler – Now Available

Commodity Review 20201023 by Andrew Pedler – Now Available

World Steel – China: Industry & Energy

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

The world’s equity and commodity markets appear to collectively be taking long and deep breaths.

Concerns ahead include:

  • The USA election, for which many are now believing Biden’s lead is large enough to provide a victory”
    • The 2020 United States presidential election is scheduled for Tuesday, November 3, 2020.  It will be the 59th quadrennial presidential election.  
    • Voters will select presidential electors who in turn will vote on December 14, 2020, to either elect a new president and vice president or reelect the incumbent(s).
    • The constitution does not actually set an election date though historically that has been consistent.   It does specify that the President-elect will be inaugurated on January 20th
  • In the mean time the (“lame duck”) president remains in his post.  
    • That is of some concern to Democrats, and the markets,  if as is thought, Biden wins. 
  • Covid-19 infection numbers (and deaths) continue to grow in USA, Europe, India and South America (Brazil).  ,
    • The markets widely reacted positively to the renewed prospect of support for a USA recovery, following Trump’s switch to support a stimulus package.  
    • In reality a USA recovery  will take a while. 
  • Gold price is awaiting some clearer direction:  We believe there is some optimism for recovery stimuli being promoted, and partly a stronger USD (this week).   
    • There are no notable reductions in geopolitical risk, nor any (major) escalations, though several outbreaks of peace are being attempted: .  
    • UAE & Bahrain appear to be achieving benefits of mutual agreements.
    • Armenia and Azerbaijan have agreed to a cease fire.  
    • Yemen’s warring sides have completed a mass prisoner swap.
  • At this week’s LME Week, Copper stood out as the most attractive base metal, displacing nickel which held that position for the past two years.
    • Fundamentals for most base metals remain strong.  … with the market largely waiting for a long heralded demand pickup. 
  • Oil markets are struggling at low prices, driven by broadly lower demand. 
  • Industrially China (and parts of Asia) are recovering, while recovery in the rest of the world is a struggle.