Comments of particular interest are noted with ‘*’.
- Base metal inventories remain tight, though some prices are just starting to reflect fundamental positions. Uncertainties generated by geopolitical activities continue to hinder normal trading conditions, though a sense of some certainty or time-frames to outcomes, appears to be calming some of the market nerves. Pinchpoint positions are mostly less than 1 week’s consumption.
- More notice is now being taken regarding the lack of exploration success for new (particularly greenfield) deposits, despite increased expenditure. Several in Customer industries are making references to expected tight markets in the mid-term.
- Matau believes that the forecast electric vehicle sales growth rates of +20% p.a. for ~10 yrs (see Commodity Review 18 April) from 2020 (i.e. next year) will be dampened by the resource industry’s inability to supply critical metal feedstock those growth rates in that time-frame. The longer investors wait to address the lack of exploration funding and success, the more volatile the crunch will be.
**Copper There have been fewer significant discoveries (Cu and other commodities), despite much greater exploration spending than in past.
*Cobalt Macquarie forecasts a surplus, though Glencore’s return to the Co market is far from smooth.
Nickel Tesla outlook is for Ni shortfall in the mid term. Ravensthorpe to restart (upon improved price outlook).
*Zinc & Lead Zn has been the best performer. Chinese stimulus anticipated to assist Pb.
*Tin Peru-Minsur. DRC Bisie project. Risks in DCR’s Kivu district could be very disruptive.
*Aluminium Deficit conditions in Al market not believed by financial markets. Delay will mean stronger impact later.
Gold Central Banks loading up with gold, though with no meaningful impact on price.
Platinum & Palladium Pd’s deficit driven rally expected to slow. Pt’s surplus still persists.
Oil Russia production reduced on contamination issues. USA expects Saudi to cover Iranian losses.
Coal China seeking to curtain domestic coal output, reducing operations hours. Continues to restrict Australian thermal shipments.
Iron Ore Outlook for USD 100/t cfr by broker, on supply disruption and robust demand.
Shipping Freight rates were mixed though iron ore boosted Australian routes and Indonesian coal was down.
*World Steel output: positive growth in many countries.
*China – Freight & Passenger traffic: Strong freight growth, though passenger traffic is shrinking.
USA – PMI: Outlook is for slower but positive growth.
*USA Construction Spending: Construction Spending is shrinking, despite government support for public & non-residential spending.