Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • Australian exploration is recovering from lows in mineral and petroleum spending.  Gold has grabbed a significant share of the spend in this current high geopolitical risk phase, however the tightness of base metals markets warrants more spending in those arenas.  That said, historically periods of tight budgets have often led to more careful targeting of drilling. 
  • Base metal inventories remain tight. Most prices are in the ‘nose of pinch-point graphs.  Pinchpoint positions are mostly less than 1 week’s consumption.  
  • Trade & geopolitical tensions abound!  Uncertainties generated by geopolitical activities continue to hinder normal trading conditions.  Repeated claims that ‘progress is being made’ have not (yet) borne fruit.  Trump has eased sanctions against Turkey, and forced an agreement with Mexico.  There appears little or no actual movement on an agreement with China (but plenty of rhetoric).  The US economy appears to be slowing from its recent blistering pace, according to last week’s and this week’s data. 
  • Baker Hughes Rig counts show reduced numbers of active rigs against low oil prices. 

 SUMMARY  

Copper  Codelco hopes to avert a strike at Chuquicamata while transforming it from o/c to u/g operations.

Cobalt  PRX & IGO drilling the Grimlock project.  Initial results are high in Co.

*Nickel  Over 40x auto-makers are pivoting toward EVs, resulting in forecast demand increases for Ni & Co.

Zinc & Lead  Both Zn & Pb markets recorded deficits in ’17 & ’18, though outlook differs between them for ’19.

*Tin  /  REEUSA Critical Minerals – USA scrambling to secure critical minerals supply with no ‘China element’.

Aluminium  Australian PM defending domestic Al exports to USA, under existing agreement.

Gold  Victoria’s plans to introduce a royalty on gold mining.

Platinum & Palladium  .AngloPlats’ labour issues at Mototolo  have been resolved.

*Oil  USD 60/bbl is too low to encourage / incentivise investment in new oil production.

Coal  USA has eased pressure on Turkey’s steel industry.  Asian thermal prices are under pressure.

Iron Ore  Behemoth China Baowu to merge with Magang (Group) Holding, approaching size of Arcelor Mittal.

Shipping  Freight rates on Asian routes flat.  (Chinese Boat festival).

General 

*Australia – Mineral & Petroleum Exploration Spending:  Both Mineral and Petroleum spending is recovering from recent 10 & 13 year lows.

Baker Hughes Rig Counts – World & Nth America:  Rig counts fell during 2019 on low prices.

*USA – PMI:  Slower but remains a positive outlook.

*USA Construction Spend:  private residential spend slowdown outweighs public non-residential spend.