Shipping

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • China has  issued an air quality control plan for the Beijing Winter Olympics in February 2022, imposing ultra-low emission standards across the steel and power sectors until March 2022.  This is one of the reasons for curbing steel production and power generation, at least in the interim.   
  • Shipping data for Port Hedland and Singapore highlights falls in traffic in July despite 12mo yr-on-yr modest +ve growth. 
    • Container recoveries reflect a recovering world economy (despite covid) even to the extent that some bulk carriers are being seconded to carry containers (creating a separate set of safety & bureaucracy headaches).  
  • Copper prices are responding to strikes in Chile with more mines’ workers to vote on any action.  High prices have emboldened workers to push for improved pay (possibly as profit share).  
  • Gold price has been fairly flat for a year, and may have found a floor.  Sentiment is a key driver.  Investors should include production growth among their investment criteria.
  • Base metals’ pinchpoint graphs continue to highlight tight markets.  Matau believes such short supply is ill-positioned to feed supply into the strong growth forecasts for uptake (particularly manufacture) of ‘new-energy’ goods.  

SUMMARY  

*Copper  Copper miners on strike in Chile at Andina and are voting at Escondida.  

Cobalt  Tesla is using two blockchain solutions to track sources of raw materials (Co & Ni) for its batteries.  

*Nickel  Demand for stainless steel has soared, and outlook for electric vehicles is good.

Zinc & Lead  Wood Mackenzie forecasts strong growth in demand for Al, Cu & Zn for solar panels.  Pb is tight.

Tin  Sn & Al prices forecast, by Antaike, to outperform other base metals in Dec21HY.  Limited supply.  

Aluminium  Rusal increased Al sales for Jun21HY, but faces export taxes which may reduce Dec21HY sales.

*Gold  Asian retail demand (India & China) picked up markedly on recent lower gold prices. 

*Platinum & Palladium  Palladium prices may moderate as platinum re-substitution into catalytic converters emerges.

Oil  Newer Chinese oil refineries, ‘Teapot 2.0’, are better suited to China’s goals than ‘Teapot 1.0’. 

*Iron Ore  Iron ore prices have fallen markedly, Miners still very profitable.  Volumes have slipped in July.

*Shipping  Container ships in high demand as economies, even seconding bulk carriers to carry containers.

General 

*Port Hedland – Iron Ore:  yr-on-yr growth is modest +ve, but mo-on-mo growth fell markedly.

*Singapore – Ship Traffic:  Containers continue recovery, but bulks fell in July.  Tankers stable.