World Steel – Rigs

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Coronavirus:
    • China is resuming industrial and commercial activities, though many of the workforce upon return have to undergo a further 14 day quarantine.  Whuan’s rail networks are being re-opened.  
    • The rest of the world is entering high infection rates and fatality rates are escalating, particularly in countries that have not taken early enough nor aggressive enough precautionary actions. 
  • World steel production (February) has yet to really show impact of the slowdown anticipated from the pandemic impacts on commerce. 
  • Base metal prices are expected to languish until the world shows clear signs of recovery, or disruptions become severe
  • Nevertheless, investors should identify and evaluate commodities and companies that they plan to invest in as global economies and sectors recover.   

SUMMARY   

*Copper  Coronavirus posing a significant threat to global mine supply.  

Cobalt  GM & Tesla move to NCMA batteries, reducing Co per battery.    

*Nickel  MCR advances re-start, incl Cassini.  Twiggy votes for Ni with cheque book.  PAN, POS, MCR.

Zinc & Lead  Trevali suspends operations at Caribou Zn, on low prices and high TCs.  Mexico’s Pb-Zn boom.  

Tin  Four major Sn producers suspended some of all of production till end of March.       

Aluminium  The aluminium industry is facing a huge supply glut.

Gold  Re-arranging logistics to move gold, in absence of usual commercial flights.  

Platinum & Palladium  Pd & Pt price surges on South African mine closures. 

*Oil  A new storage problem is brewing in the oil patch.    

*Coal  ArcelorMittal declared Force Majeure in Europe.  FM clauses are tighter now. 

*Iron Ore  China seems to be emerging from the industrial hibernation forced by the virus.  Iron ore trade is resilient for BHP.  FIFO issues to be worked out.  

Shipping  Demand, bunker costs and freight rates reduced. 

General  

*World Steel:  positive production growth, with some effects of the pandemic starting to appear.  

*Baker Hughes – North American Rig Counts:  Rig numbers starting to fall with reduced oil prices.