Rig Counts, PMI, Au price correlations

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • 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.  More media commentary is recognising this condition.   However sentiment (geopolitical) continues to drive prices over fundamentals.
  • Trade war announcements regarding re-entering negotiations (e.g. China-USA, North Korea-USA, Iran-USA) are likely to result in protracted negotiations, as parties currently remain distant on terms.  These could be drawn out till say mid-2020 … though that is perhaps a little transparent.

 

SUMMARY  

Copper  Price down on strong USD and markets seeking a firm deal  between USA & China.

*Cobalt  Chinese CoSO4 demand (EVs & smartphones) has declined since early 2018..

*Nickel  China’s Ni ore stocks falling.  Liquefaction risks of shipping Ni laterite ores.  Plant cost blow-outs.

*Zinc & Lead  Zn & Pb both in deficit.  Chinese refined Zn output up.

*Tin  China to lift ban on foreign investment in Mo, Sn, Sb & F, but not W nor REE.

Aluminium  ABX advances its projects on refining bauxite ore to aluminium fluorides.

Gold  India to increase gold import taxes.  Au price down on strong USD and good USA jobs data.

Platinum & Palladium  Norilsk better placed with Pd than South Africa with Pt.

*Oil  Brent oil is in a slim backwardation.  OPEC rolled over its 1.2 mmbbl/day cuts.

*Coal  LVPCI and SSCCC contract price agreements for the Sept19Qtr.

Iron Ore  Iron ore supply crunch may be starting to ease, though is still a fair way from ‘balance’.

Shipping  Cape and Panamax rates increased.

General 

*Gold price correlations:  what correlation?

*USA PMI:  Still slowing though PMI remains positive.

*Baker Hughes Rig Counts:  Fewer USA rigs though increased output matches OPEC reductions.