USA UK

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • There are abundant conflicting influences on supply / demand balances for most commodities, driven mostly by restrictions and issues related to the COVID-19 pandemic, which coupled with political decision making, makes forecasting with confidence very difficult.  Many companies have withdrawn guidance on their forecast results. 
  • Fundamentals for long term expectations do not appear to have materially, changed, if normal expectations for economics prevail post-COVID.
  • Coronavirus – the battle continues, with China, Australia & NZ emerging from lower infection rates and Europe and notably USA opening up at higher infection rates. 
  • Gold – Retains safe-haven status though the investment market is looking (nervously) toward several countries relaxing coronavirus restrictions and restarting industries.  
  • Base metals:  
    • We note that base metal inventory movements on Chinese exchanges are all reductions, while those of European and North American exchanges vary.   
    • China stockpiles base metals when prices are low (at three different levels). 
  • Oil markets continue to re-stabilise, as best they can, with significant storage issues.  

SUMMARY   

Copper  A surplus for 2020 forecast, but supply is shrinking, through cutbacks and restrictions. 

Cobalt  Cobalt has numerous supply chain issues, albeit facing a drop in demand.   

Nickel  CTM, IGO, ORN, LEG, CZN.  ASX Ni stocks with projects to watch carefully.

Zinc & Lead  The world changed in April after setting a high contract TC.  Expectations of oversupply shrinking. 

*Tin  When the going gets tough in base metal markets, the Chinese get stockpiling.  Financing s/p’s.     

Aluminium  Aluminium market forecast for a ‘hefty’ supply surplus in 2020.  

Gold  Near term outlook for relaxation of COVID-19 measures, but currency debasement is an issue.  

Platinum & Palladium  Diving car sales (globally) slashed car sales.  South Africa’s lockdown has slashed Pt output. 

Oil  Cushing Oklahoma – a scramble for storage for oil.  

Coal  Demand in India and China for (spot) coal is low, due to COVID restrictions and impacts.  

Iron Ore  China’s PMI is >50.  Steel mills are rapidly cranking up capacity.  

Shipping  Cape & Panamax rates slipped.  

General  

*USA – Purchasing Managers’ Index:  Down heavily, the most since GFC.  

USA – Construction Spending:  Positive growth over all.  

Germany – Industrial Production, Durable Goods, Construction:  IP -ve but durable goods +ve.  

UK – Industrial Production:  Growth -ve for IP, manufacturing and electricity & gas.