China and USA

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Key drivers for 2020 are likely to be the same ones as for 2019:  outlook for growth in developing economies and sustained health of advanced ones, set against potential supply disruptions and other geopolitical risks.  
    • Geopolitical risk jumped upon a USA strike in Bagdad.  
  • China’s industry and Energy output broadly recorded good yr-on-yr growth for November.  
  • Base metal markets remain fundamentally tight, and are incrementally continuing to tighten.   Watch for supply disruption(s).  In 2020 there are numerous key labour negotiations at operations in Chile.  Supply disruptions such as these, in absence of dramatic (geopolitical) drivers are likely to drive price responses. 

Wishing you a happy and prosperous 2020.   

SUMMARY   

Copper  Outlook for Cu demand brightens.  A firm trade deal (USA/China) is crucial.

Cobalt  A volatile 2019 but mid-long term looks strong. Availability of spot supply is not certain  

Nickel  Uncertain outlook depending on outlooks for stainless steel & EVs.

Zinc & Lead  Global Zn supply poised to surge in 2020.  China’s secondary Pb smelters at ~49% capacity. 

Tin  AVZ’s Manono deposit DFS due in Mar20Qtr.      

Aluminium  Power returned to VALCo’s plant during dispute with Ghana’s GRIDCo.

Gold  Geopolitical risk escalates with US strike plus USA mfg data and PMI down, lifted Au price.  

Platinum & Palladium  Speculators boosting bets on Pt.

Oil  USA citizens and oil workers leaving Iraq.  The world is not actually short of oil.  

Coal  Buying interest is rising in China for thermal and coking coal.  

Iron Ore  China’s port iron ore inventories are falling as steel makers replenish stocks ahead of holidays.  

Shipping  Rates steady, to down, this week.  

General  

USA – Interest Rates & TWI:  comparisons with Au, oil & Cu 

China – Industrial & Energy Output:  More positive growth than prior months. 

USA – PMI:  below forecasts and <50, indicating ongoing slower growth. 

USA – Construction Spending:  positive growth, starting to pick up.