Exploration Spending , Iron Ore, Japan Orders
Comments of particular interest are noted with ‘*’.
- Japan’s Orders to Machinery (May data) also hitting lows not seen for a long time (last week reported on IP segments).
- Port Hedland iron ore exports at record highs, reflecting China’s surging steel output, also demanding coking coal to match. However while Cape vessels demand is now flat demand for Panamaxes has jumped.
- Australian exploration expenditure (Mar20Qtr) showed strong growth for Au & Cu exploration spend.
- Base metals’ pinch-point graphs show metal prices beginning to rise, in response to (stimulus driven) expectations of increased demand, and recognition of tight supply.
- Gold prices lifted this week, as did share markets. Oddly the conditions posed by Covid now have positive factors for both markets: risk & stimulus.
*Copper RIO slashed forecast Cu output from Oyu Tolgoi. Further tightens markets.
*Cobalt KoBold Metals, a start-up by a coalition of billionaires, plans exploring Canada for cobalt.
*Nickel Ni prices in recovery mode. Near term supply issues. Long term demand growth to squeeze.
*Zinc & Lead Zn & Pb mine supply and demand both disrupted. Downstream activity is picking up
Tin Alphamin-Bisie performing well. Long term Sn demand to outstrip production. Way to go yet.
Aluminium China is unlikely to dominate growth in the Al market in the next two decades.
*Gold Both equities and gold prices are increasing. Current conditions may suit both.
Platinum & Palladium Russian Pd output un-phased by Covid. Provides Russia with stronger market position.
*Oil IEA’s 2020 demand forecast lifted, though USA covid-19 cases may dampen demand growth.
Coal Steel production growth needs to be matched with coking coal supply. Met-coal cost curves.
Iron Ore China’s iron ore stocks are stable. This year’s wet season has had minimal impact on miners.
Shipping Panamax rates jumped this week, with Cape rates unchanged.
*Pt Hedland – iron ore exports: China’s steel industry is surging. Iron ore export levels are high.
*Pinch-point graphs – Base metals: Prices are rising while inventories return to low levels.
*Australia – Mineral and Petroleum Exploration Spending: Growth in spend on Au & Cu.
*Japan – Orders to Machinery: negative growth for total orders. Limited positive segments.