Comment: Most industrial metals prices have fallen further as investors grow increasingly nervous that a trade conflict between the United States and China, and USA’s politically inspired sanctions on Russia, Iran and Venezeula, could escalate, potentially damaging economic growth and metals demand. However the fundamentals remain tight.
However most economic parameters we can see to date (see this and recent Commodity Reviews) remain sound, and we expect fundamentals will ultimately win over sentiment.
Of particular note this week read those items below marked with “*”:
*Copper Cu TC/RCs increased markedly in late June on smelter disruptions.
*Nickel “There is not enough (forecast) nickel mine supply”.
*Zinc & Lead Zn mine production to increase but TC’s remain at low levels. Pb outlook good despite EV rhetoric.
Tin Two different tin markets and two different signals. Probably best to watch Shanghai.
Aluminium Brazil is in discussions with USA for sanctions exemptions.
*Gold Gold appears to have a reasonably strong (inverse) correlation with USA 10 yr bond rates.
Platinum & Palladium PGI research shows the wedding market has become a ‘stronghold’ for Pt jewellery.
*Oil Oil prices jumped on USA’s threats of sanctions on Iran (and secondary sanctions on others).
Coal Global economic outlook impacting on the coking coal markets. Thermal demand is increasing.
Iron Ore China’s steel mkt retains strong margins. Iron ore imports remain strong. (Despite tariffs).
Shipping Reduced rates for Capes and Panamax.
*World Steel: Strong positive growth, with contributions from just a few emerging economies.
*Pinch Point updates: Ni continues to tighten, Sn stock incr’d. Cu, Zn, Pb, Al are tight.
USA – Durable Goods, Vehicles, Electronics & computers: Durables strong, Vehicles weak.
Japan – Industrial Production: Moderate +ve growth.