China, UK, Germany

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • China   reports for Industry & Energy output for July are substantially positive.  
  • Base metal inventories continue to remain tight.  Not much has changed.  Most prices are in the ‘nose of pinch-point graphs.   Pinchpoint positions are mostly less than 1 week’s consumption.  However sentiment (geopolitical) continues to drive prices over fundamentals.  

The theme of the June Resources Rising Stars conference earlier this year was I think very appropriate for the current investment and geopolitical market … “Pick the stock, not the market” … which lends to careful assessment of projects, stocks and management, to choose where to invest.  The nature of very tight metals markets has been seen before, and can turn markedly, very fast.  However at this stage time frames are being clouded, and often delayed, which makes stock selection challenging.  

  • Outlook is for ‘not enough’ new mine supply in coming years (the next decade), for several key commodities.  

 SUMMARY  

Copper  Southern Peru Corps’ large Tia Maria project working through environmental permitting.

Cobalt  Glencore’s DRC operations face several challenges: markets and political risks.

*Nickel  IGO warns of further looming Ni supply deficits.

Zinc & Lead  Sumitomo’s Zn-Pb in Bolivia facing strikes.  Other Bolivian mines near to exhausting Reserves.

Tin  U.S. Steel to idle its tin mill.  It is cheaper to import tin to USA.

Aluminium  Victoria’s Portland Al smelter struggles to remain viable despite government subsidies. *Gold  Still focussed on trade wars, yield curves.  If anything rhetoric is escalating,

Platinum & Palladium  Amplats targeting a Li-ion battery that uses Pt group elements instead of Co & Ni.

Oil  Oil prices dipped upon resurgence of tariff wars.

Coal  Indian met-coal demand slowing, partly due to Indian activity and partly global conditions.

Iron Ore  Prices down upon curbed Hebei production & BHP outlook.  Reduced optimism in USA.

Shipping  among all the above, demand for shipping is up markedly.

General  

*Singapore Shipping:  the main segments:  Bulk, Tankers & Containers all recorded +ve growth.

Yield Curves – USA & Australia:  USA’s short end is inverted, Australia’s is not at present.

*China – Industry & Energy output:  widely positive growth rates for July

United Kingdom – Industrial Production:  -ve growth, except electricity & mining.

Germany – Industrial Production:  -ve growth, except construction.