Comments of particular interest are noted with ‘*’.
- 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 Many companies have withdrawn guidance on their forecast results.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.
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.
*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.