Ni, Oil, Central Banks (AU)

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • The Bond yield curve for Australia sags in the middle but are end-to-end ‘normal’.  The USA’s is pretty flat but look more ‘normal’.
  • Base metal inventories remain tight, though prices are just starting to reflect those fundamental positions.   Uncertainties generated by geopolitical activities continue to hinder normal trading conditions.  That said, Zn is clearly tight, while Cu and Ni are sensitive to disruption.
  • Central Banks (China & Russia) are loading up with gold, as a means of diversifying away from USD.  Several countries hold ambitions for ‘Reserve’ currency roles.  USA (the Administration) may be taking steps that may effectively accelerate the move of the USD away from Reserve currency status, as the world chooses not to tolerate abuse of that position. 

 

SUMMARY  

*Copper  China’s Cu conc imports increased, driven by scrap restrictions.  Chilean Cu output down.

*Cobalt  Oversupply in the market expected to remain up to 2021, then supply likely to be short.

**Nickel  Significant shortfall forecast, unable to meet EV demand unless incentive Ni price increases.

*Zinc & *Lead  Emerging producers NCZ & G1A are moving past hurdles and milestones toward targets.

Tin  Tin’s project pipeline is thin.  Outlook is healthy.  ANW & SRZ.

Aluminium  RIO and Alcoa to progress with process to cut smelter emissions.

*Gold  Russia’s and China’s central banks increase gold holdings.  Reducing exposure to USD.

Platinum & Palladium  Russia and Zimbabwe have agreed to jointly build a new Pt mine in Zimbabwe.  Deficits forecast.

Oil  USA oil production forecast to increase, limiting potential for price spikes.  A quandary for Trump.

Coal  Australian met-coal exports to China increased due to rebound in China’s domestic steel output.

Iron Ore  China’s imports of iron ore up in March – restocking post winter restrictions.

Shipping  Aftermath of Cyclone Veronica continues to disrupt trading.

General 

*Central Bank Gold holdings:  rig count changes still led by prices.

*Baker Hughes – Rig Counts – North America and World:  rig count changes still led by prices.

*Germany – Industrial Production & segments:  construction orders underpinning IP.

*United Kingdom – Industrial Production & sectors: Sluggish growth from early 2018.

*Japan – LNG Prices:  starting to de-link from oil prices, bit by bit.