Exploration Australia

Comments of particular interest are noted with ‘*’. 

Matau’s Comments:  

When hearing or reading of forecasts of supply or deficits, always consider which side of the story the writer is from (supply or demand), or is the author an impartial analyst or group.  It often helps frame the comments.  

  • Australian exploration spending recovery is well under way in minerals, and is starting to recover for the petroleum sector.   
  • Geopolitical uncertainties continue at pace, many USA driven, and mean that several markets are uncertain as to their expected direction.  The surge in political unrest / demonstrations in Iraq, Iran, Chile, France, Bolivia, Hong Kong (still), Haiti, & Algeria, is somewhat surprising in the concurrent timing, though perhaps witnessing Hongkong has led unrest down these paths.  
  • USA PMI data is still poor, and consistent with other USA  manufacturing data. 
  • Saudi (despite earlier commentary) has again led OPEC in calling for output reductions to support the oil market balance and prices.
  • Base metal markets remain fundamentally tight, and are incrementally continuing to tighten.  Prices continue to be relatively low, influenced more by market sentiment that focused on uncertainty.  These conditions cannot be sustained.  Watch for supply disruption(s). 

 

SUMMARY  

*Copper  Prices expected to increase in a tight mkt for Mar20Qt, and improve to year end.

*Cobalt  Avg Ni, Co & Mn use per battery is increasing despite slowdown in EV car sales.

*Nickel  Stainless steel outlook is upbeat in China but not in rest of world.  Watch Ni’s contango.

Zinc & Lead  AZI, HRR & RVR.  Despite a tight market and positive news, sentiment keeps prices low.

*Tin  China’s Sn output down.  China’s looming New Year 2020 is of the Metal Rat.

*Aluminium  Trump re-imposes tariffs on Brazil & Argentina, despite exemptions granted May 2018.

Gold  Australian ownership of domestic gold production has improved from 30% in 2002 to 60% recently.

Platinum & Palladium  Norilsk testing a digital metal assets trading platform using blockchain, but likely to ban crypto.

*Oil  OPEC+ has agreed to reduce oil output in addition to curbs agreed to in Oct 2018.

Coal  Met-coal settlements for Dec19Qtr by POSCO.

Iron Ore  China’s iron ore imports fell in Nov. India’s iron ore output likely to reduce in 2020-21.

Shipping  Cape & Panamax rates increased this week, supported by iron ore.

General 

Australia – Exploration Expenditure:  Minerals spend recovering well.  Petroleum growth started.

USA – Purchasing Managers’ Index:  Only one segment for Nov data is >50.