It has been a volatile week, driven primarily by reactions to USA sanctions and pending sanctions, fears of Chinese and global slower growth. Fundamentals are being pretty much ignored. Fear is driving prices, but inventories continue to decline.
This week Matau focusses on the USD TWI and correlations with gold and other commodities, then at the AUD, CNY and USD indices reflected by several other key and emerging currencies, and at gold price indexed in the same key and emerging currencies.
This week’s comments of particular interest are noted with ‘*’.
*Copper Copper supply faces shortages in the medium to long term.
*Cobalt Cobalt faces a supply squeeze, or disruption, if demand is as forecast.
*Nickel Exchange inventory is suited to batteries, and is falling.
*Zinc & Lead Spot TCs are low, Chinese smelter margins are tight. Steel (galv) demand remains strong.
Tin Tin demand is expected to increase markedly with forecast of EVs.
*Aluminium Chinese demand growth for Al forecast to peak in 2023.
Gold A volatile week, with gold’s response to bad news a lot softer than years past.
Platinum & Palladium Unions threaten to bring South Africa’s Pt industry down.
*Oil Swings in oil prices forecast on Trump’s sanctions and forecast changes in shipping rules.
Coal SSCC & high CV thermal prices to close to consider selling SSCV on spot markets.
Iron Ore Japan’s largest steel maker playing down tariffs and plans to boost steel output.
Shipping Panamaxes preferred over Capes this week with better flexibility and comparable prices.
*USA TWI correlations. Strongest with gold. Not so much other commodities.
*Foreign Exchange relations – AUD, USD CNY & gold: A perspective on currency movements.
PinchPoint updates: inventories continue to fall. Prices fell on sentiment, not fundamentals.
*China – Industrial and Energy Output: growth negative except positive for select items, and for energy.
USA – Industrial Production and Capacity Utilisation: steady positive growth.