by Marg | Nov 22, 2021 | Commodity Review, Now Available
China, USA
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- Emergence from the Covid-19 Pandemics around the world is facing some headwinds (Northern Hemisphere winter, and likely relaxing too much, too soon, too confidently).
- Global recovery growth is noticeably slowing, though not stalling.
- Expect more turbulence and slower actual recoveries. …notably: Austria, Germany, Denmark, China, USA … et al.
- China Industry & Energy Output and Transport conditions selectively show significant slowing. … notably steel slowing but energy demand increasing.
- China this week gets many mentions in other commodity segments, both as a driver and hinderance.
- USA’s economy is facing some headwinds but (a few) segments are still reasonably robust
- Base metals’ pinchpoint graphs continue to highlight (very) tight markets. The prices are responding strongly to low stock levels.
- High prices have still NOT drawn additional stocks onto exchanges for: Cu, Zn, Pb, Ni nor Sn.
- In fact for most of these stock levels are continuing to decline despite high prices.
- Implies very tight markets.
- New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available.
- Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates touted by manufacturers and entrepreneurs.
- Actual rates will have to work to actual rates of raw materials supply growth. That said the critical NEV commodities present some attractive investment opportunities.
SUMMARY
*Copper “Global markets will need four times the nickel and double the copper in the next 30 years”.
*Cobalt Li ion batteries still seeking to reduce Co content, but Co price continues to rise.
*Nickel Kabanga Ni (Tanzania) to develop a major Ni mine – a history of some political risk.
*Zinc & Lead USGS proposes adding nickel and zinc into its redrafted critical minerals list. China Pb exports
*Tin Sn exchange inventories at multi-year lows. Land port from Myanmar to China is closed.
Aluminium Explosion at Chinese (Yunnan) Al smelter, pushed prices into backwardation.
Gold USD price down on increased USD value and USA Federal Reserve commentary.
Platinum & Palladium Implats’ bid for Royal Bafokeng thwarted by Northam Platinum.
*Oil Europe at risk of power shortages due to insufficient gas reserves.
*Iron Ore Prices lowest since Nov 2020, and expected to fall further on China’s energy controls.
*Shipping Multiple factors behind the fall of the dry bulk market since early October, many involving China. .
General
Australia & USA Yield Curves: Yield curves looking more ‘normal’ … but just at low rates.
*China – Industry & Energy Output: Steel products – negative, & Energy positive growth.
*China – Transport: Freight are at slower rates (border bans did not help). Pax are still way down.
*USA Housing Starts: really slow growth, including non-starts relative to authorisations.
*USA Industrial Production: reasonable positive growth.
by Marg | Nov 15, 2021 | Commodity Review, Now Available
Singapore, Port Hedland, LME
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- Base metals’ pinchpoint graphs continue to highlight (very) tight markets. The prices are responding strongly to low stock levels.
- High prices have still NOT drawn additional stocks onto exchanges for: Cu, Zn, Pb, Ni nor Sn.
- In fact for most of these stock levels are continuing to decline despite high prices.
- Implies very tight markets.
- LME – what happens if LME runs out of inventory?
- New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available.
- Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates touted by manufacturers and entrepreneurs.
- Actual rates will have to work to actual rates of raw materials supply growth. That said the critical NEV commodities present some attractive investment opportunities.
SUMMARY
Copper Codelco’s Chinese customers reluctant to sign supply contracts due to backwardation.
Cobalt China Molybdenum (CMOC) has increased Co output.
Nickel Indonesia’s anti-monopoly agency is investigating domestic smelters.
Zinc & Lead Zn TC’s steady. AON’s Kroussou Pb-Zn project has large scale promise.
Tin Extreme tightness continues in the tin markets.
Aluminium China’s power curbs continue .
Gold Prices increased, responding to USA CPI data.
Platinum & Palladium Palladium – a market summary.
Oil Oil prices increased – Significant new supply cannot be brought to market quickly.
Iron Ore Prices continue to reduce. Property sector accounts for about a quarter of China’s steel demand.
Shipping Dry-bulk sea freight posted its first rise in five weeks.
General
Port of Singapore – shipping: traffic reduced in October, for all but tankers.
Port Hedland – Iron Ore: Shipments widely down though Indonesia & Vietnam are well up.
LME – what happens if LME exhausts its stocks: It is really tight. Policies are being reconsidered.
by Marg | Nov 8, 2021 | Commodity Review, Now Available
Japan – US
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- Japan’s Orders to Machinery reports respectable growth with many segments’ order levels back to pre-pandemic levels.
- Base metals’ pinchpoint graphs continue to highlight (very) tight markets. The prices are now responding strongly to low stocks.
- High prices have still NOT drawn additional stocks onto exchanges for: Cu, Zn, Pb, Ni nor Sn.
- In fact for most of these stock levels are continuing to decline despite high prices.
- Implies very tight markets.
- New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available.
- Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates touted by manufacturers and entrepreneurs.
- Actual rates will have to work to actual rates of raw materials supply growth.
SUMMARY
*Copper Chile politics: Gabriel Boric does not plan to interfere with existing mining concessions.
*Cobalt China seeking to secure Ni & Co Resources.
Nickel NIC has signed a limonite supply agreement.
Zinc & Lead Gelion Technologies developed a Zn-Br flow battery, with potential.
*Tin Fitch increases Sn price forecasts. SRZ reports multiple wide high grade Sn intercepts.
Aluminium Russia’s expected removal of export taxes likely to boost supply.
Gold Gold price up on USA Fed comments for a ‘slow’ increase in rates.
Platinum & Palladium Unprecedented demand for Pt for jewellery.
*Oil USA refiners are exporting the most gasoline in three years.
*Iron Ore Chinese industrial demand remained sluggish due to steel output curbs.
Shipping Maritime industry under scrutiny to reduce emissions. Shipping accounts for 80% of global trade.
General
USA & Australia – Yields: Curves ‘normal’, but 10yr rates recently reduced, on uncertainty.
*USA – Purchasing Managers’ Index: New Orders reduced but still strong outlook.
*USA – Construction Spending: Private & Residential continue to grow. Not Public & Non-Res.
*Japan – Orders to Machinery: Machinery orders broadly improving. Many at pre-covid levels.
by Marg | Nov 1, 2021 | Commodity Review, Now Available
Copper – Gold – USA – Japan
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- Japan’s steel industry reports decent recovery growth from the pandemic period, though still has some way to go. However its vehicles output is well down.
- USA’s Durable goods orders report decent growth (perhaps enhanced by covid induced low past year data. However vehicle output is well down (like Japan’s and as reported last week – China’s).
- Matau believes it likely that global vehicle output is being restricted by the shortage of micro-chips, which is also reported to be impacting demand for Pt & Pd
- Base metals’ pinchpoint graphs continue to highlight (very) tight markets. The prices are now responding strongly to low stocks.
- Copper markets report as being under continued supply pressure.
- Ni & Co have been shown to enhance catalysts for production of hydrogen, which may add to demand for these two key New Energy metals.
- High prices have still NOT drawn additional stocks onto exchanges for: Cu, Zn, Pb, Ni nor Sn.
- In fact for most of these stock levels are continuing to decline despite high prices.
- Implies very tight markets.
- New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available. Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates of the manufacturers and entrepreneurs. Actual rates will have to reduce to the actual rates of raw materials supply growth.
SUMMARY
*Copper Chile’s Cu output recorded its worst month this year, with falling grades and labour disputes.
*Cobalt Catalysts with Co & Ni make ‘green’ hydrogen production cheaper and more efficient.
*Nickel Ramu Ni (PNG) Ni-Co output suspended due to pandemic (for an est 2-3 wks).
Zinc & Lead Teck’s Red Dog mine output increased yr-to-date.
*Tin The tin market has yet to solve the supply-demand imbalance.
Aluminium USA and the European Union (EU) have agreed to ease tariffs on steel and aluminium products.
Gold Au price fell on rising USA bond yields & stronger USD.
Platinum & Palladium Analysts’ price forecasts reduced for Pt & Pd.
*Oil Nov 4th OPEC+ meeting expected to extend production cuts.
*Iron Ore The iron ore seaborne market supply might lose 40 million tonnes (Mt) in 2022.
*Shipping Coal exports have staged a significant recovery so far in 2021, helping the dry bulk market’s rally.
General
Top 10 Copper miners: Production in Chile was impacted by the pandemic in 2020-21.
World Gold Council: Sep21Qtr demand down largely due to ETF sales.
*Japan – Industrial Production: Steel products up but vehicles down (chip shortages?)
*USA – Durable Goods Orders et al: Durables up but vehicles down (chip shortages ?).
by Marg | Oct 25, 2021 | Commodity Review, Now Available
China – USA
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- China’s industry & energy data continue to show effects of its trade sanctions, and production curbs. Steel products output is down. Energy production is up. Renewables related products mostly appear with positive growth. Manufactured goods have varied growth profiles.
- USA’s housing and industrial production data records growth, but we consider these data still have a covid affected (low) denominator.
- Los Angeles port is utterly clogged, mostly with empty containers. Only allowed to stack them 2x high … no floor space left … so ships waiting offshore cannot bert to unload as ther eis nowhere to put their containers. Appealing to change regulations to allow stacking to 6x high.
- Base metals’ pinchpoint graphs continue to highlight (very) tight markets. The prices are now responding strongly to low stocks.
- High prices have NOT drawn additional stocks onto exchanges for: Cu, Zn, Pb, Ni nor Sn.
- In fact for most of these stock levels are continuing to decline despite high prices.
- Implies very tight markets.
- New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available. Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates of the manufacturers and entrepreneurs. Actual rates will have to reduce to the actual rates of raw materials supply growth.
SUMMARY
Copper China views Cu as a highly strategic (& critical) metal.
Cobalt Top ten Cobalt producers (outside DRC). Outlook to be driven by batteries.
Nickel Prices at 7 yr highs on supply concerns relative to forecast demand.
Zinc & Lead Rising power prices could lead to metal producers relocating operations away from Europe.
Tin Sn prices have been the best performers this year-to-date. Stocks low and demand good.
Aluminium Aluminium alloys are also in short supply.
Gold Prices reduced gains upon USA Fed comments on inflation in 2022, and on winding back stimulus.
Platinum & Palladium PBoC launched ‘Panda’ (Pt) coins..
Oil Oil prices boosted by concerns of coal and gas shortages.
Iron Ore RIO plans massive power investments for its projects.
Shipping USA scrambling to clear US port logjams.
General
USA – Bond Yields: Marked lift in yields, now implying economic improvement sooner
China – Industry & Energy Output: Mixed: steel products down but energy & renewables better.
China – Transport: Freight is growing slowly while Passenger traffic is still struggling.
USA – Housing Starts: positive growth likely still enhanced by (covid) low-denominator.
USA – Industrial Production – Capacity Utilisation: Growth rates still enhanced by covid effects.
by Marg | Oct 18, 2021 | Commodity Review, Now Available
Shipping
Comments of particular interest are noted with ‘*’.
Matau’s Comments:
- China’s power constraints and blockading of roads & highways in Peru are impacting the production output of several of the base metals. (mostly of Cu & Zn +/- Pb). We believe these events will have temporary effect, but the markets are already tight.
- The world is progressively recovering from the Covid-19 pandemic. Increasingly talk is turning to ‘living with covid’, however it appears that many people are not paying attention and are expecting the ‘old normal’ to return. Epidemiologists caution that we still need to be careful, as there is still much to be learned about the Covig-19 strain(s).
- Shipping data illustrates the slowing of activity in response to multiple drivers that are restricting supply and demand for many commodities during a period of high uncertainty, despite economies showing signs of recovery. Recovery will progress and make good, but at present it is a battle.
- Base metals’ pinchpoint graphs continue to highlight (very) tight markets. The prices are now responding strongly to low stocks.
- New Energy Vehicles’ much touted massive growth rates might grind to a halt in a couple of years if some battery configuration changes do not become available. Matau believes that the resources industry will struggle to supply raw materials at the optimistic growth rates of the manufacturers and entrepreneurs. Actual rates will have to reduce to the actual rates of raw materials supply growth.
SUMMARY
*Copper The power crises could shift forecasts of copper oversupply next year to shortfalls. + Mexico – changes its rules!
Cobalt Sales of NEVs reduce upon cuts to subsidies in China. Co is scarce and sought after.
*Nickel If Ni-free batteries do not become available, the EV revolution grind to halt in only ~2 years.
Zinc & Lead Refined output of Zn is stressed (power shortages). China’s Pb-acid battery output is growing.
Tin The tin market has yet to resolve the supply-demand imbalance evident throughout this year.
Aluminium Rusal plans to supply Al to China to meet its (uncharacteristic) shortfall in production.
Gold Gold price up fractionally (in USD). Hallmarking is now mandatory in India.
Platinum & Palladium Top 10 Platinum producers.
*Oil Power cuts in China. Coal shortages in India. A scramble for petrol in Britain. … and more!
*Iron Ore China’s northern steel mills asked to cut production from mid-Nov21 to mid-Mar22.
*Shipping Dry bulk market – two more solid Qtrs. Watch Mar22Qtr & Jun22Qtr.
General
Port of Singapore – Shipping: impacted by numerous disruptive forces. Containers are strongest.
Port Hedland – Iron Ore: impacted by numerous disruptive forces. Excl-China sources have best growth.
USA – Yields, Gold, Copper & Oil prices: As expected
USA Energy End Use: Trying to recover from disruption(s), but how much will it achieve?
