Venezuela

Comments of particular interest are noted with ‘*’.

Supply issues continue to abound, keeping some tension in most metals markets.  This week it is copper.

While much is made (fears) of slowing Chinese output data.   Michael Pettis – professor of economics at Beijing University, has written a note “What Is GDP in China?” detailing the various ways of recording GDP, and how China reports. He suggests China’s actual GDP growth rates may be quite different, and lower, than are reported.  To better understand reporting of GDP everyone should read this note.  It is also available in Andrew’s Blog on the Matau website.

Matau has, in recent issues, noted slower (negative) growth in Chinese industrial output, though quite healthy growth rates in electricity demand and in freight (all modes) within China, among other select data, air conditioners, colour TVs, and bullet trains,, which suggest that these reflect aspects of growth that is not being captured in the other data Matau collects.  

 SUMMARY  

*Copper  Chile:  rain suspends output.  DRC: Glencore shedding labour.  (affects Co as well).

*Cobalt  LME proposal re: Co contract (free of human rights abuse) needs a better audit process.

Nickel  BHP revitalising its Nickel-West operations.   China-USA trade talks ahead of 02Mar19 deadline.

Zinc & Lead  ORN: Prieska BFS due June19Qtr.   G1A:  40% stake sale to Toho Zinc.

Tin  Sn market deficit for Jan-Nov18.  Chinese & Japanese demand reduced.

Aluminium  Global Al market to see a number of deficits over the next few years.

*Gold  Bank of England withholds Venezuelan (Maduro’s) request to release Venezuelan Au on deposit.

Platinum & Palladium  Sth Africa to launch national Pt strategy, to support its economy.

*Oil  Venezuelan tankers anchored off USA pending payment (into ‘blocked’ accounts).

Coal  Expect Chinese market support post Chinese New Year.  Level of support is currently not certain.

Iron Ore  Price jumped post Brazilian dam failures.  Expect clearer price signals post Chinese New Year.

Shipping  Cape rates fell on dam breaches.  Panamax and Supramax rates down this week also.

General 

*Pt Hedland Iron ore shipments:  Positive growth at slow rates.  Strongest to India & Sth Korea.

*USA PMI:  continues with a strong outlook.

*Japan – Industrial production, vehicles and electricity:  negative growth