Commodity Review 20200410 by Andrew Pedler – Now Available

Commodity Review 20200410 by Andrew Pedler – Now Available

Oil Rigs & LNG

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Coronavirus:
    • China is emerging from COVID-19, but its customer countries are still dealing with peak infections and restrictions, so a recovery in demand is lagging a potential supply recovery.  
        • i.e. The rest of the world is entering a high infection rate and fatality rate phase of the COVID-19 pandemic with rates escalating, particularly in countries that have not taken early enough nor aggressive enough precautionary actions.  
  • Gold – Central banks quandary with cancellation of passenger flights, there is more limited ability to transport gold bullion.  
  • Base metals:  
    • Right now base metals markets are still more focused on the collapse in global demand, both at the first-use fabricator and the end-use consumer stage.  However supply is being affected by travel and transport restrictions.  Development decisions are being deferred. 
    • Supply is prone to disruptions due to mining lockdowns and logistics bottlenecks are still playing catch-up with the demand shock rippling around the world.  Moreover, Chinese importers are probably carrying sufficient supplies of raw materials to ensure production over the short term. 
    • Matau adds, that while China is restoring industrial production operations, its major export customers are still in the throes of lockdowns attempting to contain the COVID-19 pandemic and presenting reduced demand until they do. 
    • Base metal prices are expected to languish until the world shows clear signs of recovery, or disruptions become severe.  
    • The novel coronavirus is rewriting the commodities’ rule-book, and possibly rewrite the supply response ‘rules’ as well.  
  • Oil markets have been roiled by recent abandonment of production agreements and inability of OPEC+ to fully agree on production constraints, at this week’s meeting.  
  • Investors should identify and evaluate commodities, and companies, that they plan to invest in when global economies and sectors recover.  
    • This environment is remarkably volatile with many jumping to conclusions on thinly detailed data.  
    • Analysis needs to be rigorous, and the commodities and companies robust.  
    • Turning points may be executed quickly, so investors need to have intended investment targets already understood.  
    • Whenever you forecast something you will be precisely wrong.  What matters is:  by how much; in which direction; and how robust your forecast really is. 


Copper  SFR announced Black Butte project has an approved RoD, (conditionally) approving mining.  

Cobalt  COB’s process achieves excellent recoveries, testwork on GEM’s Millenium project shows.   

Nickel  Philippines suspended some major Ni mine operations to comply with virus containment measures.

Zinc & Lead  Peruvian Govt extends state of emergency (COVID-19), affecting Zn & Pb mining.    

Tin  Alphamin [Bisie project in DRC] needs higher Sn prices in order to service debt at end of June.      

Aluminium  RIO’s NZ Tiwai Point smelter is struggling through an ops review.  Needs lower electricity prices.

*Gold  Russia’s (and others’) central banks struggling with transport issues and storage for gold bullion.  

Platinum & Palladium  IPT targeting attractive Broken Hill PGM project.  .

*Oil  OPEC+ meeting proposes to reduce 10mm bbls/day, … conditional upon Mexico also agreeing.   

*Coal  Beijing’s multiple injections may fail to revitalise the steel sector.  China is emerging from COVID-19, but its customer countries are still dealing with peak infections and restrictions.  

*Iron Ore  Chinese steel inventories dropped, but auto sales in China and Europe are down.  

Shipping  Cape rates down but Panamax rates up (on seasonal agri-shipments).  


*Baker Hughes Rig Counts – Worldwide & North America:  The OPEC+ deal is not yet done. 

*Port Hedland – Iron ore exports:   Healthy growth reported for March exports, mostly to China. 

*Japan – LNG prices:  LNG prices very low, likely on reduction of demand. 

Commodity Review 20180511 by Andrew Pedler – Now Available


Despite all the geopolitical uncertainty, the world appears to be reporting good economic growth, volatile rhetoric, but reasonably consistent growth.

Of particular note this week read those items below marked with “*


Copper  Potential copper hot-spots on the Qld-NT border – upon release of new government data.

Nickel*  Demand outstripping supply.  Stainless then batteries drive demand.  Supply uncertain at present.

Zinc & Lead  Dugald River (MMG) commenced production.  PEX has new drill results.  G1A adds new results.

Tin  TNT Mines (TIN) working up new Sn-W project in Tasmania.

Aluminium  LME warehouses suffering delivery delays, again.

Gold  Very little movement in the Au price.

Platinum & Palladium*  Is Norislk Nickel too large to sanction.  The impact would be significant.

Oil*  OPEC & Russian cuts holding well.  Risk of US sanctions on Iran.

Coal  Met-coal outlook softer.  Thermal holding well.

Iron Ore  Increased prices in steel and futures markets buoy iron ore.  Pt Hedland exports up.

Shipping  Shipping rates up this week on good demand.


Baker Hughes Rig Counts:  Price sensitive & lagging oil price.  Some calling for USD 100/bbl oil.

Pinchpoint updates- Cu, Zn, Ni, Pb, Sn, Al:  Still tending to tighten, though uncertainty is evident.

Japan – :LNG prices:  turning up to follow oil prices.

Commodity Review 20180504 by Andrew Pedler – Now Available

Despite all the geopolitical uncertainty, the world appears to be reporting good economic growth, volatile rhetoric, but reasonably consistent growth.

Of particular note this week read those items below marked with “*”:


Copper *  Mine supply disruptions, with potential for more.  China’s economy is reported as ‘resilient’.

Nickel*  2018 Ni deficit forecast doubled.  Chinese stainless producers ramping up (but in the red?)

Zinc & Lead  Zn:  1028 treatment charges reduced on tight mkt.  Pb: China flips from importer to exporter.

Tin  Chinese Sn imports dwindled.  … became a net exporter in March Qtr.  Myanmar supply issues.

Aluminium  Trump’s Aluminium sanction (relief) agreement talks due to resume this week.

Gold  Global gold demand for March Qtr was the lowest since 2008.

Platinum & Palladium  Pt continues to suffer with the move away from diesel powered cars.

Oil  Oil prices reacting to Trump’s threats to remove (nuclear) sanction relief from Iran.

Coal  Positive sentiment as Chinese steel prices firmed this week.  SA’s Eskom to import thermal coal.

Iron Ore  Dalian iron ore futures commenced trading Friday with new access rules.

Shipping  Spot freight rates in Asia remain robust on healthy demand for ships.


Battery Metals (Ni-Cu-Co)*:  Moody’s expect mine supply will be a limiting factor for EV battery manufacture.

Pinch Point updates – Cu, Zn, Ni, Pb, Sn, Al:  tight, though near term direction a little uncertain.

USA – ISM PMI:  Lower but still positive growth.  USA – Construction Spending:  Positive growth.

China – Industrial Output*:  positive March growth only for select items: power, cars, air con, Li-batts.

Commodity Review 20180427 by Andrew Pedler – Now Available

Of particular note this week read those items below marked with “*”:


Copper  ISCG expects small surplus 2018 but deficit 2019.

Nickel * Ni-intermediates the most cost effective means of bringing more Ni online.  Sanctions roil mkts.

Zinc & Lead  Zn: Progress for IBG, RVR, MMG, NCZ.  Pb:  ILZSG forecasts deficit for 2018.

Tin  Eu anti-trust regulators investigating a packaging cartel in Europe.

Aluminium * Sanctions roil aluminium mkts.  Alumina markets also tight, too high for some smelters.

Gold  China’s imports of gold from HK suggest China’s demand is subdued.

Platinum & Palladium  Launches of hydrogen fuel-cell cars boosts interest in Pt.

Oil  This time it is Angolan production that is failing.  Usual story … lack of exploration.

Coal  Rising infrastructure costs threaten Russia’s expansion plans into eastern markets.

Iron Ore  Chinee steel futures trading at highs as construction demand kicks in.

Shipping  Cape and Panamax rates both up.

Ancient British mines:  evaluated for the high-tech markets.

PinchPoint updates* -Cu, Zn, Ni, Pb, Sn. Al:  All still tight, though Zn & Sn suffered stock builds.

World Steel output: *  Growth continues incl through winter restrictions.

USA* – durable goods, vehicles, electronic goods et al:  Strong growth.

Commodity Review 20180420 by Andrew Pedler – Now Available

Of particular note this week read those items below marked with “*”:


Copper   **Cu supply still sensitive to potential disruptions (Chile & & Peru).

Nickel ** USA sanctions against Russia do not affect nickel … yet!  Watch closely!

Zinc ** & Lead  Zn:  China and others, watching Greenland elections.  Pb: North Korea exports.

Tin  Demand is growing.  China may restructure its industry further.

Aluminium  Rusal’s cargoes of aluminium are severely disrupted by USA’ sanctions.

Gold  Doubts for M&A on established projects.  Look more to emerging production.

Platinum & Palladium  Northam Platinum’s Pt recycling business starting to deliver.  Impact of any sanctions on Norilsk.

Oil  Optimism returning to the oil market.  Oil inventories have reduced.

Coal  Tohuku settles JFY thermal contracts.

Iron Ore  Iron ore inventory at Chinese ports thought likely to be mostly lower grades of ore.

Shipping  Demand for Cape vessels jumped.


Japan – LNG Prices **:  Down in March … Oil prices up in April – expect LNG to follow.

USA Housing Starts:  volatile but trend is for good growth. .

USA Industrial Production & Capacity Utilisation:  consistent steady IP growth. .

Pinch-Point updates  **– Cu, Zn, Ni, Pb, Sn, Al:  All tight!  (incl Ni)

Commodity Review 20180413 by Andrew Pedler – Now Available

Of particular note this week read those items below marked with “*”:


Copper *  Chinese imports of unwrought Cu & Cu concentrate increased in March Qtr.

Nickel  Signs that impact of Trump policies might not be as dire as feared.

Zinc * & Lead  Market worried by rumours of SRB’s inventory refreshment.  LeadFX’s tech report on Paroo Stn.

Tin  VMS’ Mt Lindsay, one of a number of Tasmanian prospective tin developments.

Aluminium  Sanctions on Rusal drives withdrawal of Al from exchanges.

Gold  Increase in physical retail gold sales on global uncertainty..

Platinum & Palladium  Diesel engines account for just 15% of global Pt demand.

Oil  Market anxiety over strikes on Syria, may, be softened by a muted Russian response.

Coal  Mixed fortunes in thermal coal over the past two weeks.  Coking quiet on traders’ absence.

Iron Ore  Baosteel expects slight decline in China steel output.  Vale enthusiastic about China’s economy.

Shipping  Cape rates up modestly.


Port of Singapore – Shipping:  Positive growth containers, but negative growth bulks & tankers.

Pinchpoint graph updates: Base metals fundamentally tight, though recently loosened.