USA

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

  • USA’s economy still continues toward slower growth (IP), though house starts are now positive.  Will these resume a former role as a leading indicator for the USA economy? … with timing for growth into 2020?
  • Drone strikes on Saudi oil infrastructure have strongly escalated geopolitical tensions.
  • The USA – China tariff talks are to resume, though with no great expectations of meaningful outcomes.
  • 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 continues to react strongly to threats of supply restrictions.  Cobalt price is reacting to supply restrictions brought about by the high political risk of doing business in DRC.  Other base metal prices are currently wilting under fears of a slowing global economy.  

SUMMARY  

*Copper  Analysts sceptical about ability of Chilean & Peruvian Cu output growth targets.

*Cobalt  Prices up as DRC issues threaten key supply.

*Nickel  Strong backwardation.  Chinese stainless producers restock for Golden Week.

Zinc & Lead  China: Zn output strong.  India: per capita Zn consumption is low on a world scale.  Nyrstar restart (again).

Tin  Indonesia launches JFX Sn contract, attempting to establish an Indonesian “global” reference price.

Aluminium  Australian Al producers ‘warned off’ taking advantage of USA’s tariff-free status for Australian Al.

Gold  Gold does indeed to have a ‘safe-haven’ status under volatile conditions.

Platinum & Palladium  Palladium (Pd) futures prices hit all-time highs on supply concerns.

Oil  Attacks on Saudi refinery capacity escalated tensions.  Production to recover by end-Sept.

Coal  Nippon sets SSCC contract Sep19Qtr.  China’s Golden Week, port restrictions.  Indian monsoon.

Iron Ore  Concerns about efficacy of Chinese stimulus.  China’s iron ore imports still strong.

Shipping  Voyage chartering rates affected by drone strike in Saudi.

General 

*USA Treasury – Yields & Margins: inverted, depending on the measure (3mo or 2 yr) vs 10yr.

*Baker Hughes – Rig Counts:   Global rig count down, largely as USA & Canadian rigs.  *Permian Basin oil may have future supply issues related to hole spacing.

*USA – New House Starts:  Strong growth in starts.

*USA – Industrial Production & Capacity Utilisation:  IP only weakly positive.