Exploration Spend

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • Australia – Exploration Expenditure   Spending is recovering in both minerals and petroleum sectors. 
  • Base metal inventories continue to remain tight.  In a broad sense 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.   Nickel price is reacting strongly to threats of supply restrictions.  
  • Pinchpoint graphs  have selective stories by (base metal) commodity, though most are fundamentally tight.  Pb, Ni, Zn & Sn are in backwardation and Cu & Al are in contango.   
  • Outlook for base metals and battery minerals remains at ‘not enough’ new mine supply in coming years (the next decade), for several key commodities, particularly for EV sales growth.  

 

SUMMARY  

Copper  China eased bank lending, but Cu price focussed more on USA-China trade talks.

Cobalt  Co prices lifted on expected reduction to global supply.

Nickel  Indonesia confirms it will ban Ni (laterite) ore exports.     POS

Zinc & Lead  The forecast Zn surplus appears elusive … with little sign to date.  Supply disruptions.    VXR

Tin  Prices up on major producers’ announcements of cuts.

Aluminium  Japanese Al premiums are down in recent negotiations.

Gold  USA & China stated will work on fresh trade negotiations.  Market does need meaningful outcomes.

Platinum & Palladium  Investor demand for Pt has been ‘unprecedented’ in the June HY.

Oil  Three factors that will determine the direction of oil prices in 2020.

Coal  Settlements for Jun19Qtr – HCC & LVPCI.

Iron Ore  Seaborne Fe ore price down as ore lump premiums drop.

Shipping  Freight rates rise over major Asian routes.

General 

Australia – Mineral & Petroleum Exploration Expenditure:  The recovery continues.

USA – Purchasing Managers’ Index:  almost all categories less than 50!